Further regulatory reviews are causing the delay of the Apple Pay launch in South Korea. Regulators are said to be looking into something as part of their review process of Apple Pay.
Regulators Looking Further Before Apple Pay Launch in South Korea
According to a filing by the Financial Supervisory Service (FSS) on Monday, Apple has already passed the “ninth ridge” to the South Korean market. This means that authorities completed the review of the terms and conditions of Apple Pay. However, due to further probe by FSS, not everything has been finalized. The FSS said they are still looking into something as part of the review process. This needs to be done before concluding the review process.
Due to this delay, Apple Pay may officially not go live in the South Korean market until the end of December at the earliest, or as late as early January. In September, Apple updated its terms of service for South Korea to accommodate using Apple Pay to make payments from credit cards linked to the iOS Wallet app,
Other Technical Matters That Apple Needs to Consider
Reports earlier indicated that Apple agreed to partner with Hyundai Card. The financial services merchant will be the sole and exclusive provider of Apple Pay in the country upon launch and will continue to do so for one year. Once the one-year exclusive deal has lapsed, other Korean banks may start offering Apple Pay to their customers.
The report noted that Apple’s decision to award Apple Pay exclusivity to Hyundai Card may be a disadvantage since other banks also wanted to provide the service upon launch. Additionally, it said that many merchants would not be able to offer initial support for Apple Pay. This is because many South Korean card merchants use Magnetic Secure Transmission (MST) instead of the EMV international payment standard. Implementing that standard will cost merchants additional money.
It will be interesting to see how Apple Pay pans out in the South Korean market. Being a Samsung country, Apple is facing tough competition with only 34.1% smartphone market share in September, according to StatCounter.