adminRecently, Samsung Electronics informed domestic card companies that it will not extend existing contracts for Samsung Pay.
Following Apple Pay’s arrival in Korea earlier this year, there are speculations that Samsung Pay may follow suit by charging fees.
Reporter Yoonju Um reports.
[Reporter]
We asked citizens who use Samsung Pay why and when they use it.
[Reporter] Park Jung-bin / Jamsil-dong, Seoul: I don’t carry a wallet, and I use Samsung Pay for all my payments and T-money. Wherever I go, I always think it’s convenient to pay because it’s a merchant].
[Kim Chul / Mokdong, Seoul : When I don’t want to take out (my wallet), I usually have my smartphone in my hand, so I think I often turn it on and use it right away].
It’s been eight years since Samsung Pay was introduced in South Korea with the strength of accessibility and convenience.
The number of users using Samsung Pay has reached 16 million.
However, recently, Samsung Electronics notified domestic card companies that it will not extend the existing contract that it does not receive fees for using Samsung Pay.
The reason for Samsung’s sudden change in stance is that it had automatically renewed the contract without any renegotiation.
The biggest reason is Apple Pay, which landed in Korea earlier this year, according to market analysts.
Currently, Hyundai Card pays Apple a 0.15% fee per transaction, while Samsung Electronics has not received any fees from the card company.
For this reason, there are speculations that Samsung Pay may follow suit.
For now, Samsung is coy, saying that nothing has been officially decided yet스포츠토토.
However, card companies are scrambling to prepare for such a move.
[A card company representative: We are waiting to see what happens because we are not in the driver’s seat of the contract].
[B card company representative: We are reviewing various ways to compensate for card company losses….]
The problem is that if Samsung Pay’s fee-based payment system becomes a reality, the cost burden of card companies could be passed on to consumers.
This is because rising interest rates have increased procurement costs and merchant card commission rates have been cut, leaving card companies that are losing money every day with no other option.
[Kim Dae-jong / Professor of Business Administration, Sejong University : Card companies are also doing this because it is very difficult and troublesome, and if we go to a structure where Samsung Pay receives card fees, card companies will also have a very large burden…. The bottom line may be that consumers will have to pay again].
The financial authorities are only reiterating that even if Samsung Pay becomes a fee, the principle remains the same: card companies should not pass on the burden to consumers or merchants.
When the card companies sit down with Samsung in August to negotiate a new agreement over Samsung Pay, it will be interesting to see how the issue of fees will be discussed at the negotiating table.