SEOUL, June 13 South Korea plans to install or upgrade 300,000
mobile payment checkouts at major retailers and transport services this year in
its latest push in the potentially lucrative market as the likes of Google Inc
and Apple Inc competitively introduce their own pay-by-phone
South Korea's communications commission also said on Monday that it would
require mobile phone vendors to equip all smartphones with near field
communication (NFC) technology, which allows wireless data exchanges at short
range, letting people pay for goods, store electronic tickets, collect coupons
by swiping a cell phone at a checkout or scanning tags on movie posters.
So far, only two NFC-enabled handsets have been offered in South Korea --
Samsung's Galaxy S II and Pantech's Vega Racer -- and a lack of standardised
settlement checkouts at retailers, and disagreements over fee-sharing structure
and controlling customer information have prevented the industry from taking
The domestic smartphone market has exploding more than ten-fold to top 10
million handsets in just 18 months, or about a fifth of the population, but the
mobile payment market, which some say could eventually replace credit and debit
cards as the primary means of payment, has been slower to take off.
The commission said mobile operators and credit card firms had agreed to
install or upgrade checkouts with NFC processing technology in retailers, fast
food outlets, coffee chains and petrol stations, while card companies were
offering discounts to customers using mobile payment services to promote the
"Mobile payment technology has been available since early 2000 but it failed
to take off for various reasons ... but today's agreement is a small step toward
mutual growth going forward," the head of the Korea Communications Commission
said in a statement.
The authorities expect the new initiative to boost NFC-enabled phones to
more than 5 million units this year.
The global mobile settlement market is expected to grow to $1.1 trillion by
2014 and NFC-based technology is set to account for a third of the market,
according to some industry experts.
Korean operators have moved into the credit card business -- SK Telecom Co
Ltd is the top shareholder of unlisted Hana Card with a 49 percent
stake and KT Corp owns BC Card, hoping combing their mobile
businesses with virtual wallet technology to generate a new source of revenue.
In the United States, Google said last month that it had agreed with
MasterCard Inc , Citigroup Inc , Sprint Nextel Corp and
transaction processing company First Data to make a mobile payment system for
commercial services this summer in New York and San Francisco through
smartphones using its Android platform.
(Reporting by Miyoung Kim; Editing by Chris Lewis)