Sisa Week = Reporter Lee Mi-jeong Today (28th) marks the first week since the launch of Apple Pay in Korea. Since its release, it has received enthusiastic attention and made a right eye contact in the market. As a result, discussions on the introduction of Apple Pay are lively in distribution. However, Shinsegae Group, one of the Big 3 distributors, shows a cautious stance on the introduction of Apple Pay, and attention is focused on the background.
◇ Distributors are stepping up because of the great interest in Apple Pay
According to the industry, Apple Pay, Apple’s simple contactless payment system, started domestic service on the 21st in partnership with Hyundai Card. Apple Pay was the dream of iPhone users. As it has been a long-awaited service, the response at the beginning of the launch is hot. On the first day of its release alone, the number of devices registered with Apple Pay cards is known to exceed 1 million.
According to Counterpoint Research, 12.5 million iPhones were registered in Korea last year. It is expected that a significant proportion of iPhone users will sign up for Apple Pay. Counterpoint Research also predicted that more than half of users would switch to Apple Pay from other simple payment platforms by the end of the year.
However, there are significant limitations to the widespread use of Apple Pay by current iPhone users. First of all, the only card linked to Apple Pay is the Hyundai Card. Users of card companies other than Hyundai Card cannot use Apple Pay. Additionally, carrier card functionality desired by iPhone users is not supported.
Apple Pay is also limited. Apple Pay can only be used at merchants with a near field communication (NFC) terminal. Given that the domestic NFC terminal penetration rate is less than 10%, it is expected that there will be limitations to the rapid expansion of use.
As of the announcement on the first day of the launch, participating Apple Pay merchant brands are: △ 6 convenience stores, including CU and GS24 △ 12 department stores and shopping malls, including Lotte Department Store and Hyundai Department Store △ 10 mart and supermarket, including Costco and Lotte Mart Korea △ Coffee 19, including Twosome Place and Pascucci Places △ 7 sweets and desserts including Paris Baguette △ 13 restaurants including McDonalds △ 6 living and home appliances such as IKEA △ 20 hotels and resorts including Haevichi Hotel & Resort △ ing fuel and recharge shops including GS Caltex △ Movies including Kyobo Book Center There are 5 books and 7 leisure and travel destinations including △Seoul Land. There are 17 websites online, including Baedal Minjok and Musinsa.
In the middle of this, the decision of the ‘Big Distribution 3’ over the Apple Pay partnership was mixed. Although affiliated companies Lotte and Hyundai Department Store participated as affiliate brands right after the launch of Apple Pay, the Shinsegae Group does not support Apple Pay, except for Emart 24, a convenience store affiliate. In other words, Apple Pay cannot be used at Shinsegae-affiliated E-Mart, Shinsegae Department Store, Starbucks, Starfield Outlet, and No Brand Burger.
◇ Shinsegae, the Apple Pay partnership is lukewarm… “As it is in the early stages of its introduction, we are monitoring it”
Starbucks is a coffee franchise with a high preference for the young MZ generation in their 20s and 30s. Among iPhone users, there are many voices that Starbucks does not support Apple Pay.
Regarding this, a Starbucks official said, “We are watching as it is in the early stages of the introduction,” and “we are reviewing whether it should be introduced while monitoring various issues.”
Other distribution subsidiaries of the Shinsegae Group are known to be in a similar situation. Some say Shinsegae’s cautious move is concerned about a drop in the usage rate of its own simple payment service, ‘Surp Pay’. However, the Shinsegae side draws a line against this view, saying it is an excessive interpretation.
Sukpay is a simple payment service introduced by Shinsegae in 2015. Shinsegae has been working hard to expand the use of Sukpay online and offline for the past few years. In addition, Shinsegae has been striving to expand synergy with ‘Smile Pay’, G Market’s simple payment service under eBay Korea, which it acquired in 2021.
Meanwhile, when Shinsegae introduced Samsung Pay in 2015, it also reacted conservatively to related service partnerships. The partnership was not signed until a year after Samsung Pay was introduced. In line with this stance, Apple Pay support is also expected to be cautious.
|Apple Pay threatens the simple payment market, but its impact on the smartphone market is limited|
|2023. 03. 20||counterpoint|