Korean banks rub hands for possible Samsung Pay scheme implementation

Domestic subscribers to Samsung Pay spent more than USD 82.6 million through the system within two month of its launch in August 2015. In December 2015, the amount rose to arund USD 200 million, and the number of subscribers surpassed one million in October 2015, according to Samsung Electronics, koreajoongangdaily.com reports.

Currently, Samsung Pay only works with Woori Bank, but the exclusive contract between the two will expire in March 2016, and more institutions are seeking to link up with Samsung Pay. Samsung Electronics plans to expand a number of its smartphone models that feature the Samsung Pay system. More financial institutions are eager to get involved in this business as subscribers to the system, and the amount they spend, appear to be growing.

Shinhan Bank will sign an agreement with Samsung Electronics in February 2016 on doing business with the company’s mobile payment system. “We will launch a brand new Samsung Pay service after the company’s exclusive deal with Woori Bank expires,” said a Shinhan Bank representative, the source cites.

KB Kookmin Bank is also getting involved. A bank official said they are currently negotiating with Samsung Electronics on the mobile payment system. The bank was told that other local banks such as NH Nonghyup Bank and Industrial Bank of Korea are also showing interest. As the banks start to compete with each other, banking services such as transferring money and paying utility bills might be added to the current services.

Traditional banks are in need of more customers that actually visit their premises. Some 89.3% of people used mobile banking or other online-based banking services to deposit, withdraw or transfer, while only 10.7% of them actually visited the banks to do so in the third quarter last year, according to the Bank of Korea.

Customers who use their smartphones for banking services continue to grow. A total of 4.23 million transactions were made through mobile banking in Q3, 2015. During the same period, the number of transactions rose 3.2%, and the total amount involved rose 4.5% each from Q2, 2015.