Hundreds of billions in fees from Apple Pay… Samsung vows “We’re angry, but we’ll stop it for free”
Samsung can’t do the same in its home market as Apple does in South Korea먹튀검증, where it’s making a killing on payment fees.”
In the end, Samsung made a bold decision. It decided to keep Samsung Pay free. This is to prevent the kind of situation that Apple Pay triggered, which resulted in hundreds of billions of won in card fees a year.
Charging Apple Pay and then Samsung Pay would have significantly eroded card companies’ profitability, which would have led to a reduction in consumer benefits.
In the case of charging, the fees that card companies will have to pay to Apple Pay, Samsung Pay, and other simple payment companies will amount to hundreds of billions of won a year.
According to a senior industry official on the 2nd, Samsung has decided to continue its fee-free policy in Korea after much deliberation. The company’s public stance is that it is “still undecided,” but internally, the decision to keep it free is firmly in place, the source said.
Samsung Pay in action.
Earlier, Samsung had notified more than 10 card companies that it would end the free fee extension for Samsung Pay. As a result, card companies will have to sign a new extension agreement with Samsung by August at the latest to continue using Samsung Pay.
Since Apple Pay, which was launched in Korea in March this year, charges a 0.15 per cent fee, Samsung Pay is also expected to charge a fee. Samsung is particularly upset with the card companies for passing on the “all-in” fee to Apple Pay.
Card companies are also on edge. The industry estimates that if Samsung Pay, which is the number one in the convenience payment market, charges a 0.15 per cent fee like Apple Pay, it will have to pay an additional 70 billion won a year in fees.
If it is expanded to all simple payment companies, the scale will reach hundreds of billions of won a year, and it is inevitable that the profitability of card companies will be hit. In the end, consumers will also suffer.
An advertisement for Apple Pay on the Hyundai Card building in Hannam-dong, Yongsan-gu, Seoul.
Hyundai Card, which was the first to introduce Apple Pay in Korea, pays Apple a 0.15 per cent fee for each transaction. This is the highest among countries that have introduced Apple Pay. It is five times that of China.
Although it may have some effect on attracting new subscribers, experts say that the more Apple Pay is used, the less profit Hyundai Card will make. Hyundai Card has been spending a lot of money to promote Apple Pay, even launching an Apple Pay TV advert.
Samsung’s decision is also based on the judgement that the impact of Apple Pay has not been as great as expected. Hyundai Card was successful in attracting customers, issuing more than 350,000 new cards within a month of introducing Apple Pay. However, actual card usage actually declined. This is because Apple Pay is mostly used for small payments such as convenience stores, and most of its subscribers are in the 2030s.
An industry insider said, “It is questionable whether Hyundai Card’s investment is worth the cost. In the past, when KT introduced the iPhone in Korea, it had an event effect, but it spent a lot of money by unilaterally being dragged by Apple.” “As a result, it was a storm in a teacup compared to the cost investment,” said an industry insider.