After months of regulatory hurdles, Apple Pay has finally been launched in South Korea. Apple users in the country can now use Apple’s payment service across various devices like iPhone, Apple Watch, iPad, and Mac, just like in other markets. Apple’s foray into the South Korean market raises questions about Google’s expansion plans for its own mobile payment service, Google Pay, in the country.
According to Duncan Olby, who leads Apple Pay, Wallet, and Payment for international markets, “Apple Pay is available from today in South Korea.” He announced this at a press conference held in Seoul. Users in South Korea can now add their credit and debit cards on Wallet and use their smartphones instead of physical payment cards in retail stores, restaurants, cafes, and also make purchases online, in-app, in-store, and on the web.
Apple has been trying to bring its payment system to South Korea since 2017 when it was first launched in the United States. However, regulatory hurdles initially delayed the launch as the company was unable to register as an electronic financial business operator in the country. Later, local regulators scrutinized Apple’s payment system closely to ensure that it did not violate Korean payment regulations, which caused the launch to be further delayed.
Last month, the Financial Supervisory Service (FSS), a South Korean financial regulator, approved the long-awaited Apple Pay launch. The FSS said it would allow local cardholders to use Apple’s payment service, including Hyundai Card, with whom Apple was in talks to have an exclusivity partnership for a year. However, other local card providers are yet to participate in Apple Pay, so Hyundai Card has received an exclusive partnership by default, at least for now.
Apple Pay can only be used by customers with Visa, Mastercard, and local credit and debit cards issued by Hyundai Card, according to Apple’s statement. Apple has made a big push in its security and privacy profile, which is at the core of Apple Pay. The payment system features industry-leading protection of users’ personal information, transaction data, and credit and debit card information. Card numbers are not stored on devices or Apple servers. Instead, a unique Device Account Number is encrypted and securely stored in the Secure Element chip.
South Korea’s limited number of NFC (near-field communication) terminals in retail shops could still pose a challenge for Apple Pay. Only about 10% of 2.9 million local retailers in South Korea reportedly have NFC enabled in their credit card terminals. However, more NFC terminal installations are expected to increase by the end of 2023, according to a recent report by Counterpoint. The report also says that Apple Pay’s launch could intensify competition in South Korea’s payment market, including peers like Samsung Pay, Naver Pay, and Kakao Pay. The report suggests that iPhone and Apple Watch users are likely to switch to Apple Pay.
Apple Pay is available in more than 70 countries and regions and has partnered with over 10,000 banks across the globe. Jennifer Bailey, Apple’s vice president of Apple Pay and Apple Wallet, said in a statement, “Many of our users here have been eager to use Apple Pay for their everyday spending in-store, online and in-apps, so we are thrilled to roll out and make seamless and secure payments available across top merchants in South Korea.”
In summary, after years of regulatory delays, Apple Pay has finally made its way to South Korea, and it remains to be seen how it will fare in a market that is already crowded with local payment services. However, Apple’s strong focus on security and privacy could give it a competitive edge over its rivals, and more NFC terminal installations in retail