South Korea and Japan show the way on mobile payments and banking

Posted on: analysys.com

Although attempts in Europe to launch mobile payments or banking initiatives have failed to gain traction, there has been considerable success in South Korea and Japan. Repeating this success in other markets will be tricky and, if South Korea and Japan are to be taken as models, will require substantial co-operation between organisations in different sectors competing to move into the same market of mobile

First introduced in September 2003 by LG Telecom and Kookmin Bank, mobile banking in South Korea now has around five million subscribers paying a monthly fee of KRW800 (around USD0.80). The success of the service has only been made possible by co-operation between the banks, mobile operators and handset manufacturers. This is made easier in Korea where some companies, such as LG, are shareholders in all three sectors.

Japan, lagging behind Korea on mobile banking, is more advanced on mobile payments. Based around Sony’s FeliCa chip, consortia have been established to develop payment platforms with members including railway companies, credit card companies and mobile operators. A handset with an embedded FeliCa chip can act as a mobile wallet, travel card and credit card (as well as a phone). By the end of 2005, Sony had shipped over 10 million FeliCa chips for mobile phones. As in Korea, the basis for this success has been co-operation between parties from very different sectors.


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