Hyundai Card to provide Apple Pay in South Korea

Apple and Hyundai Card on Wednesday officially announced the launch of the simple payment service Apple Pay in South Korea.

The American tech giant said it will launch Apple Pay in the country, adding that details will be announced later. 

Interest is rising in how Apple Pay will be used in South Korea as the contactless simple payment service is expected to launch as early-March through a partnership with Hyundai Card.

Many consumers are curious if they can use Apple Pay with cards other than Hyundai Card. For now, Apple Pay in Korea can be registered for use only with Hyundai Card because the latter has priority as the nation's first contractor with Apple despite not being an exclusive affiliate.

In principle, other card companies can offer Apple Pay but are thought to need at least half a year of preparation to develop the system through new negotiations with Apple.

Card companies must also consider the range of costs needed to expand Apple Pay's use in Korea such as the supply of near-field communication terminals and payment fees. Apple Pay's fee per transaction is known to be 0.15%, and given that domestic credit cards charge 0.5%-1.5% in merchant fees, credit card companies would have to give 10%-30% of their fee income to Apple.

"After Apple Pay's adoption, we must consider the actual ripple effect and profitability according to the range of expenses," a source at a credit card company said. "Over the long run, all credit card companies will prepare for Apple Pay's launch but for now, a wait-and-see attitude is strong."

After the service's launch, a Hyundai Card user can register the card with Apple Pay for making payments at affiliated stores. Check cards from Standard Chartered Bank issued by Hyundai Card can also be registered.

Cards limited to domestic use and those at home or abroad can both be used for Apple Pay, in contrast to initial expectations that only the latter affiliated with foreign brands like Visa and MasterCard could be registered.

"A telecommunications service provider that offers tokens necessary for Apple Pay registration and payment has decided to issue them for domestic-only cards with a server in Korea," a knowledgeable industry source said.
 
Write to Nan-Sae Bin at binthere@hankyung.com