Mobile payments in Korea grow 15% annually

Mobile payment markets in Korea grew by 15 percent last year compared to the previous year, the latest data from the Bank of Korea (BOK) showed, Monday.

Otherwise called “simple payment,” mobile payment refers to a method allowing users to make a payment via pre-registered credit card information or bank account information on their mobile phones, verifying their identity by inputting passwords or through fingerprint recognition.

According to the BOK report on the usage of electronic payment services in 2023, the daily usage volume of simple payment services amounted to over 27 million transactions worth 875.5 billion won ($656 million). These were increases of 13.4 percent and 15 percent, respectively, compared to the previous year.

This is the first time that daily usage has surpassed the 800 billion won mark. Both the number of average daily transactions and the amounts for the mobile payments reached all-time highs, since related statistics began being compiled back in 2016.

Considering that the average daily transaction total was about 449.1 billion won, the domestic mobile payment markets witnessed a growth of 94.95 percent in just three years.

As to types of service providers, electronic financial business operators such as Naver Pay or Kakao Pay took up the largest proportion at 48.9 percent of the entire volume of mobile payment amounts in last year. Yet, their aggregate share in the local market decreased slightly by 1 percentage point from 49.9 percent recorded in the previous year.

Instead, the market share held by mobile phone manufacturers, including Apple Pay and Samsung Pay, expanded to 25.6 percent last year, which is up nearly 3 percentage points from 22.7 percent logged in 2022. The annual increase is largely attributed to the introduction of Apple Pay services in Korea by Hyundai Card starting last March.

At the same time, the entire amount of payments, using payment gateway services through smartphones, the internet and other electronic means, also reached an all-time high. Payment gateway refers to settlement agent services via transmitting payment information or facilitating settlement on behalf of customers and sellers in electronic commerce transactions.

The payment gateway market also rose year-on-year by 16.5 percent in 2023 with total daily transactions amounting to 1.2 trillion won, showing the settlement markets’ growth is an important axis for the expansion of the mobile easy payment industry.