Korean consumers will be able to use their mobile phones to make contactless credit card payments and pay for transport tickets from the second half of 2010, following SK Telecom's purchase of a 49% stake in Hana Card.
SK Telecom is buying a 49% stake in Korean card issuer Hana Card, for KRW400bn (US$343m). The move is "expected to bring changes to the market by allowing customers to use mobile phones as credit cards," says SK Telecom.
"The partnership is aimed at introducing and expanding the use of mobile credit cards while promoting next-generation payment and settlement services," explains SK Telecom's CEO Man-Won Jung. "With this deal, the two companies will maximise business synergies so as to create a new telecommunications and finance convergence market."
As well as enabling customers to use their phones to make payments at the point-of-sale, SK Telecom plans "to offer useful real-time information such as special notices and discount events while allowing financial transactions such as mobile banking and settlement."
Mobile credit cards, says the company, will allow "users to check credit card settlement information including details of credit card usage, remaining credit card limit and reward points, as well as other real-time information like bank accounts and membership. At the same time, it provides optimal decision-making information based on user's past purchasing record and location information while offering an integrated service that includes discount coupons, ads, membership and mileage points during credit card purchases."
"All the stakeholders are expected to benefit from the widespread use of mobile credit cards," the mobile operator continues. "Customers will be able to receive information and benefits including coupons on their mobile phones; credit card merchants will be able to boost sales and attract more customers by using information such as consumer purchasing patterns; and card companies will generate greater sales with increases in micropayment transactions and number of merchants, reduce time for plastic credit card issuance and save costs of plastic credit card production, delivery and replacement."
SK Telecom plans to introduce mobile credit card and smart payment services in the second half of 2010 and aims to deliver greater customer benefits by linking them with SK Telecom's membership programs and SK Group's OK Cashbag service.
Further moves towards the convergence of the mobile and payments card industries are expecting in the near future. Mobile operator KT is already involved in discussions to buy a stake in BC Card. And, as we reported in September, both BC Card and Shinhan Card have had plans to introduce their own mobile virtual network operator (MVNO) services in a bid to own control of their customers' mobile wallets.