With Apple Pay's arrival in Korea, competition in the domestic simple payment market has begun in earnest.

On the 22nd, Samsung Electronics announced that Samsung Pay and Naver Pay will join forces to launch a collaborative service starting on the 23rd. This is an extension of the business agreement signed last month between Samsung Electronics and Naver Financial to revitalize the mobile payment experience.

Just one day after Apple Pay was introduced in Korea on the 21st, domestic simple payment providers Samsung Pay and Naver Pay have entered into a standoff.

Samsung Electronics has currently achieved a cumulative payment volume of 182 trillion won through Samsung Pay by 2022. It holds the top spot in domestic offline payment transactions based on high terminal sales, while Naver Pay holds a significant market share in the online payment market.

This collaboration between the two companies will expand the online and offline payment experience for Samsung Pay and Naver Pay users.

Samsung Pay users can use the convenient payment system through Samsung Pay at Naver Pay online order-type merchants, including 550,000 Naver Smart Stores. Naver Pay users can use Naver Pay's offline payment method through Samsung Pay's MST (Magnetic Secure Transmission) payment method at all offline merchants nationwide that accept Samsung Pay.

Samsung Pay and Naver Pay announced that they will “continue to work together to provide users with a more convenient digital life in the payment and wallet sectors.”

■ Apple and Samsung have different simple payment methods, and the winner is
MST is a payment technology that utilizes magnetic signals from card readers. Payments are made by touching a smartphone to a card reader. It is not subject to technical limitations of card readers and can be used on most terminals.

NFC is a payment technology that utilizes wireless communication between a smartphone and a card reader or NFC-enabled terminal. It boasts high security. Furthermore, while MST requires contact with a card reader, NFC can be used in a wider range of locations.

Currently, Samsung Pay supports both MST and NFC, while Apple Pay only supports NFC.

As the highly secure NFC payment method becomes a hot topic worldwide, the adoption of such terminals is expected to gradually increase. However, the speed of this increase is difficult to predict, so it can be said that the domestic simple payment market share ultimately depends on this.

We are cautious with self-employed people, excluding large department stores. This is because the domestic NFC terminal penetration rate is still only 10%, making it cost-prohibitive to install and maintain NFC terminals solely for Apple Pay payments.

Samsung Pay adopts both MST and NFC methods, but compensates for the weak security compared to NFC by using iris recognition, fingerprint recognition, and PIN numbers.

Some have predicted that as the positive perception of Apple Pay adoption spreads among loyal customers based on the Apple brand image, the number of self-employed people willing to adopt NFC terminals will also rapidly increase.

One iPhone user expressed his intention to use Apple Pay, saying, “I registered my Hyundai Card to use Apple Pay, but I haven’t seen many stores that accept it yet.”

For the time being, Apple Pay is only available to Hyundai Card holders, but which card companies join the service, starting with Hyundai Card, is expected to have an impact on competition in the domestic simple payment market.