South Korea 2015: An Updated Review of Payment Methods


Xsolla studied the current state of the payment market in South Korea as well as the changes in regulation which are happening within Korea’s online payment industry.

State of the Gaming Market

South Korea boasts one of the largest markets for online entertainment and mobile games with almost 1/3 of the population actively playing. Since 2008, the country’s gaming market grew annually by about 12% per year. There has been a growing tendency for an increase in focus on the mobile segment within the country at the cost of a reduction in the share of PC/Mac games but even so, Korea remains one of the most attractive Asian gaming markets. The grandiose influence of local entertainment products and games to neighboring countries in Asia is what makes Korea stand out, especially after it was confirmed by studies conducted by the European Union. To learn more about the state of the Korean market, follow this link.

Plastic Cards

The payment systems market in South Korea is strictly regulated by law and bureaucratic institutions.

Credit cards occupy about 60-70% of the market and is thus the largest payment channel in South Korea. Powerful local corporations essentially control the 10+ major banks within South Korea and for any large corporation (whether its Samsung or Hyundai), they have their own bank and card.

South Koreans, historically, have been known to frequent credit cards and credit opportunities at affordable rates. Each company that offers such credit cards put forward certain conditions and, in most cases, are willing to work directly with the game; although working with foreign projects has been proven to be extremely difficult.

Payments using credit cards online in South Korea has a number of important differences. Typically in most countries around the world, you can get a “white-label solution,” implying that the payment will not be redirected to another page. In South Korea’s card solution however, it does not offer the same opportunities. When you pay with a credit card online, the network user’s information is sent to and through external sites whether it be through the aggregator or the bank.

Alternative Payment Methods

30-40% of the market is occupied by South Korea’s alternative methods of payment.Among them are the following tools:

Alternative payment methods make up 30-40% of South Korea’s market and among the most popular tools include:


As the name implicates, Teencash is a special card for young people because in South Korea, not everyone is eligible to receive a credit card (various reasons i.e. not old enough). If you are over the age but still unable to receive a bank issued credit card, you can pay for digital goods and services using charged cards such as Teencash.


ARS is a very original method of payment over the phone which works with home landlines. In order to make a payment, you must enter your home phone number and citizen registration number. ARS will give a specific number (format 060 – **** – ****) to call and the client will receive a PIN which is required to make a payment. As a result, the money spent will be added to the end of the month bill from your telephone company.


The T-money card is used to pay for transportation primarily including: buses, taxis, and subways. However, they can also be used to pay for goods in certain games and at conventional retail stores. The amount can be replenished on the card directly and T-money boasts several types of their product including miniature and durable plastic key-chains which you can attach onto the phone for convenience.


These are the usual scratch cards on paper coated with a material to protect the PIN unless scratched off. Once you obtain the number on the card, you can enter it on the Cultureland page online. Money is converted into virtual currency which can be spent on goods sold in partnership with Cultureland. You can use the card in physical stores as well.

The popularity of this payment method is largely due to it’s high prevalence around. Cultureland cards are accepted almost everywhere: the bookstore, movie theater, restaurant, shopping centers, amusement parks, and of course, online games. The main demographic Cultureland targets for this payment method are students. Usually, parents give these cards to their children to purchase a book or something related to school. Instead of purchasing these books however, teenagers usually buy virtual items in their favorite games. Cards can be purchased online, at retail stores, or at banks.

Direct Carrier Billing

South Korea has especially developed mobile payments. Amongst the largest and most advanced operators include SKT, KT, and LGU +. Payment through the mobile is very advantageous because of the low rates. In order to use this method, you need a number as a citizen of South Korea or to provide the necessary documents (immigrant card).

New Payment Methods and Rejection of Active X


Until recently, South Koreans could only pay for goods online through Internet Explorer. Other browsers were not available due to incompatability with their protective solution, Active X.

According to various studies and estimates, this restriction results in approximately a 20% reduction in conversion overall. Given the negative impact of Active X, starting from March 2015, the Korean government decided to abandon the use of the system throughout. South Korea is expected to emerge with new payment methods and better functionality as a direct result of this reform.

Following this trend, simple payment methods like PayPal and Amazon are expected to be introduced in Korea. A simple payment method, also known as easy payment, allows to make payments without any security program and it is easy to use as all you need is user ID and password. Easy payment will increase the convenience of online payment and allow not only domestic users but also foreign users to make easy purchases in Korea online market.

With the abolishment of Active X and the certification process, easy transfer also became commercialized. Major enterprises in the Korean industry began to enter the Korean payment market after the change including:


Kakao Pay

Kakao Talk  – Boasts an astounding 100 million members on it’s popular messaging application. Kakao Talk recently launched an easy payment service called Kakao Pay last September in 2014. With Kakao Pay, you only need to register your car donce. After registration, the user will be given a simple ID and password with which the payment can be made. Up to 20 credit cards can be registered on Kakao Pay and, in order to raise awareness and ease people into the process, Kakao has carried out various marketing promotions such as free emoticon packs and discounts on their online store for their popular messaging app Kakao Talk.

Naver Pay

Korea’s largest search engine, Naver, has announced that they will be combining multiple payment systems (Naver Checkout, Naver Mileage, and Naver Cash) used in Naver shopping into one simple payment service called Naver Pay. They will be launching this in June 2015 and the new payment system will eliminate the existing complicated process of payment. It’s advantage of easy access through Naver accounts and mobile phone number is their leverage point and, in addition, Naver will take advantage of it’s free online messenger, Line, to make significant impact on the mobile market. Naver has established a partnership with 5 major credit card companies and is working on an affiliation partnership with 5 major banks in Korea.

Samsung Pay

Samsung announced the launch of Samsung Pay this summer. Samsung Pay relies on the innovation technology called MST which means that the payment will be done by simply touching the smartphone to the magnetic card terminal. With this method, there is no need to install NFC reader so it is expected to help the widespread adoption of Samsung Pay.


Failure to use Active X gives hope for greater democratization payments market in South Korea.Perhaps this is an important step will reduce government regulation in the segment and contribute to the spread of alternative payments in the region.

With the removal of Active X and the introduction of easy payment, the paradigm of Korea’s payment market is shifting which is resulting in fierce competition within the market. On top of this, the Korean government is considering adding a new security program called “exe.” exe can be used in the most popular browsers including Chrome and Safari but in order to go through a transaction, installation of the program is required. Because of this uncertainty, we will need to keep a close eye on the actions of the Korean government and, if this system is implemented, how it affects the payment transaction process.

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