Samsung Pay had enjoyed a clear field in the company's home country of South Korea for many years until Apple decided to ruin the party. The company launched its mobile payments service, Apple Pay, in South Korea last year. It was encouraged by the rising market share of iPhones in the country, so it was only natural for Apple to enable its payments service there.
However, despite a strong initial response, the growth appears to have cooled down for Apple Pay. So even as it launched with ambitions to take on Samsung Pay on home ground, it's easier said than done for the company.
Samsung Pay remains undisputed in South Korea
When it was launched in March 2023, Apple Pay amassed 1 million users on launch day alone. The figure later doubled in three weeks. That was impressive, considering the fact that Apple Pay requires NFC-enabled PoS machines which aren't widespread in the country.
Samsung Pay doesn't exclusively need NFC-enabled PoS systems to work, which is why it has a much larger user base in South Korea, and indeed in other countries. It accounts for 49% of all mobile payments and nearly 70% of in-person wireless transactions.
Samsung Pay works with all conventional card machines, so retailers don't have to buy expensive PoS machines to support the platform. Meanwhile, the NFC limitation prevents Apple Pay from significantly expanding its user base in South Korea. Only one in ten stores in Korea reportedly have Apple Pay-compatible machines.
Hyundai Card's exclusive partnership with Apple Pay is also due to expire in September this year and so far, no other card issuers have stepped up to take its place. The issuer also incurred a 0.15% commission fee per transaction via Apple Pay, while Samsung Pay doesn't charge a commission.
It's a mix of these factors that have prevented Apple Pay from truly dethroning Samsung Pay as the leading mobile payments service in the country. As things stand, it may prove to be harder still.
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