Apple’s foray into Asian countries has been largely successful, as many Asian countries have transformed from emerging third-world economies into spending powerhouses. Japan, China, South Korea, and smaller countries like Singapore and Taiwan have all been major partners for Apple. Although there’s plenty of competition in the region, like Huawei, Samsung, and Google, Apple seems to always have a large market share and significant influence in the continent.
Apple’s ventures into digital contactless payment systems have been widely successful around the globe, with many countries in Europe and the North American continent being able to use Apple Pay conveniently. However, Apple Pay in South Korea has been met with major setbacks time and time again. Why is Apple struggling to launch its digital payment solution in the country? Find out more information about this topic below.
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Why Is There No Apple Pay in South Korea?
There have been rumors of Apple Pay in South Korea for years now, and one would probably be surprised that the country hasn’t adopted the digital payment system. South Korea is a society that relies heavily on technology and digital systems. The population is extremely tech-savvy and adjusts well to new technology.
Unfortunately, decades ago, when the country wasn’t as developed as it is today, it experienced multiple financial breaches, hacks, and system leaks that shook the country to its core. Many individuals fell prey to scams and lost a lot of money, causing an overwhelming sense of distrust in the country’s financial institutions. This led the Korean government to develop extremely strict regulations and laws that would make it difficult for any similar occurrences to happen again.
Today, South Koreans must go through complicated processes to purchase anything online, such as a mandatory two-factor authentication every time they want to buy something. This could be in the form of Face ID, a one-time mobile password, or through a file that acts as a key that’s kept on your PC. That’s a big reason why Apple Pay in South Korea has been facing major struggles. To implement any digital payment system, the company needs to adhere to extremely strict financial regulations and comply with local terms and services, which is not as easy as in other places like the US or Europe.
When Will There Be Apple Pay in South Korea?
Originally, Apple Pay teamed up with Hyundai Card, a local South Korean bank service, to provide services in South Korea by November 30. Hyundai was advertising the introduction of Apple Pay in South Korea, and everyone was anticipating the service’s release. However, the Financial Services Department revised certain terms and conditions, delaying the release. Sources now believe that Apple Pay could launch in late December or early January. Knowing how long bureaucratic processes take, especially when it comes to financial services, we may be able to expect the service a bit later than that. Perhaps in Spring 2023.
Apple Pay South Korea Alternative: What Do Koreans Use Instead?
Apple Pay in South Korea may become a legitimate competitor to other digital payment services. But Koreans already have a plethora of options to choose from, like:
Kakao is the country’s biggest company and enjoys a monopoly on many services, from messaging services to taxi hailing. Kakao also has a comprehensive payment system and digital bank so that you can integrate all of your digital activities on one platform, somewhat similar to WeChat in China. Kakao Pay is definitely the most popular digital payment system in South Korea right now, as you can enjoy all the benefits of Apple Pay but have a much more convenient experience due to how ingrained the service is in the country.
Kakao can act like Venmo or a crypto wallet if you want to send your friend some money. If you want to purchase a gift for your loved ones, Kakao has an integrated gift shop with Kakao Pay, so you click a few buttons to complete the transaction. If you want to book services like a golf trip, a taxi, or a holiday, you can do all of that within Kakao. It would be extremely difficult for Apple Pay to compete with this type of service.
Naver is the closest competitor to Kakao and is basically South Korea’s Google. It started as a search engine and gradually branched into various other services, like real estate, shopping, and media. Naver does have its own payment system, although it’s significantly less popular than Kakao or other banking institutions. Naver Pay is useful for paying for things on Naver’s local ecosystem but isn’t widely adopted in more real-life scenarios.
For example, if you want to buy something from a Naver shop, Naver Pay allows you to complete the transaction in a few taps. If you want to book a holiday, pay for a subscription, book a hotel, or interact with online entities, Naver Pay can help you do that all on the Naver app. In South Korea, the competition lies solely between Naver and Kakao.
Apple Pay will have an even tougher time penetrating the South Korean market because if the service can manage to gain a foothold among Kakao and Naver, it still has to compete with the numerous banking institutions and their apps. All banks in South Korea have contactless payment options, travel cards embedded into the cards, and comprehensive apps with advanced services. To a Korean, Apple Pay might be extremely underwhelming, as citizens in the country are used to having many digital features available on one service.
What does Apple Pay offer that Naver, Kakao, or even banks like Hyundai, Hana, or Woori don’t? Large banks allow you to tap to pay, invest your money, and acquire special discounts on certain purchases. For now, Apple Pay is just a way for you to sync your card with your phone and use your phone as a means of transaction, something Koreans have been enjoying for years without Apple.