South Korea Payment Market Overview

Everyone knows about the sheer size and influence Japan and China have on the Asian gaming commerce market but an often overlooked underdog is South Korea.

According to recent market insight research, South Korea’s internet market is one of the most developed, not just in Asia but also in the whole world. This is backed by the fact that over 84% of South Korean households have at least broadband internet while 74% of the total population within are active internet users. 7/10 South Koreans have made at least one online purchase in the past which is astounding numbers and can exemplify the countrywide maturity when it comes down to virtual goods growth.

A Quick Word

If you were thinking of entering into the Asian gaming market, you are on the right track to success at this time. The biggest player within the virtual goods market is the mobile. South Korea has a very popular service on the mobile called KakaoTalk with over 100 million active users already. Low cost data plans, country-wide WiFi coverage, as well as extreme internet speeds help secure South Korea’s top spot in technologically advanced markets. With the omnipotent presence the mobile has with popular apps such as KakaoTalk, South Koreans are using their mobile phones for just about everything including purchases for virtual goods. The gaming industry is also incredibly large within South Korea with features such as a whole channel dedicated to gaming (Starcraft) on the TV. Professional gaming has also risen to massive popularity with popular professional gamers being treated as professional athletes and celebrities. With the rise and popularity of gaming within South Korea, it only makes sense that local payment methods to encourage purchases within these games shift and improve as well providing convenience over all other factors.

Importance of Local Payment Methods

Although South Korea is developed enough to accept the universally accepted methods of payments such as Visa, Mastercard, etc., it severely limits your growth and reach if you are only limited to international payment methods. Recent study shows that only accepting international cards limits the reach to just 20% of the total market. By providing popular localized payment methods, you not only benefit yourself and your revenues but also help secure a larger following within the South Korean market. Local payment methods generate higher sales while providing customers satisfaction because these local payment methods usually offer a package deal or promotional rewards programs with low fees. We will now look into a couple of the popular local payment methods available within South Korea.

Credit/Debit Cards

Currently, the most common and widely accepted form of virtual payment is through credit/debit cards. Within South Korea, the most commonly accepted ones are similar with the most popular ones within the rest of the world including Visa, Mastercard, AmEx. Although these are popular, the smart card has been introduced and is very successfully integrated within South Korea. The smartcard Credit Card has a chip built in which is used to provide extra security and conveniency of use wherever the smart card is scannable. Over 80% of online virtual payments are done so through credit/debit cards which is an overwhelmingly large number. A unique payment system is the BC Card which is the biggest payment processing company within South Korea. The BC Card provides payment services to financial institutions and merchants through a subsidiary company called Smartro.

Current State and Final Word

For anyone who wants to make an online purchase of over $277 in South Korea, they must authenticate it with a security software developed by Microsoft called ActiveX. ActiveX is only developed to be used on Internet Explorer which is a major problem for people who want to use other browsers such as Google Chrome and Firefox and these people cannot make large purchases which is the reason why South Korea is contemplating removing this security policy. 70-80% of South Koreans say they hate the system and would rather see it removed. With such a large virtual consumer base speaking uniformly, South Korea may actually remove this system which would free up the online payments industry which can help the growth rate for the ecommerce within. It is exciting to see how this develops within South Korea and if it does bring about the anticipated amount of change within the ecommerce market.

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2 thoughts on “South Korea Payment Market Overview

  1. alex says:

    The smartro link is broken 🙂

    • Ernest Chung says:

      Hello Alex,

      I have tried testing the link and it does link you to the intended site which is http://www.smartro.co.kr/. Please keep in mind this is a Korean website so characters may not appear completely correct if it is not a supported language on your system. If you are still not seeing the correct site can you please let me know what you are being directed to? Thanks for stopping by!

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