November 23, 2024

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A mobile payment option is used at a coffee shop. (123rf)

The local mobile payments market continued its relentless expansion last year, swelling by a whopping 17 trillion won ($12.72 billion) on year.

The total amount of mobile payments made through four major companies providing the service locally -- Samsung Pay, Naver Pay, Kakao Pay and NHN Payco -- tallied 147.79 trillion won last year, according to Financial Supervisory Service data obtained by lawmaker Oh Gi-hyoung of the Democratic Party of Korea.

The number has climbed steeply in recent years, with the combined amount logged by the four companies hitting 39.38 trillion won in the fourth quarter of 2023, up by around 40 percent from the first quarter of 2022.

Samsung Pay remains the market leader, accounting for 49.4 percent of the total of such payments made last year, especially dominant in offline transactions with around a 70 percent market share there, according to industry sources.

Other providers are strategically aligning with Samsung Pay to penetrate the offline market further.

Naver Pay, in partnership with Samsung Pay for offline services since March, saw its quarterly offline payments reach 1.7 trillion won in 2023, more than doubling from the same period the previous year.

Kakao Pay is also poised to expand its presence in local stores through collaboration with Samsung Pay.

During its earnings conference call last week, the Kakao subsidiary said it will provide offline mobile payments through Samsung Pay starting this April. Now affiliated with around 1 million stores locally, Kakao Pay will be able to expand its network to some 3 million partnered with Samsung Pay.

Naver Pay leads in online payments. According to a recent survey conducted by market research firm Consumer Insight, 20 percent of some 3,500 respondents answered they mainly use Naver Pay for online payments. Samsung Pay landed second with 13 percent, followed by Kakao Pay at 10 percent.

Financial tech firm Toss, the industry leader in terms of online transactions, has been seeking to strengthen its mobile payments services lately. Toss is reportedly in the process of acquiring SSG Pay, the mobile payment service of retail giant Shinsegae, as well as Smile Pay.

By Choi Ji-won (jwc@heraldcorp.com)