Digital payment stocks rise after Apple Pay launch approval in Korea

2023. 2. 7. 10:57
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Digital payment stocks rise after Apple Pay launch approval in Korea [Image source: Apple Pay]
Digital payment stocks in South Korea are on the rise after reports that Apple Inc. will launch its mobile payment service Apple Pay in March.

Shares of Korea Information & Communication Co. (KICC), a digital payment service provider, jumped 30.9 percent in the last two trading days to close at 16,390 won ($13) on Monday. KICC is a value-added network (VAN) service provider that connects merchants and credit card companies for a fee.

Shares of another VAN service providers KG Inicis and Nice Information & Telecommunication Inc. also rose 3.4 percent and 2.4 percent, respectively, during the same period.

The rise in the stock prices come as the financial authority allowed Apple to launch Apple Pay service. This means that iPhone users will be able to use contactless payment service through credit card companies including Hyundai Card Co.

“The number of Apple Pay users have exceeded 500 million, becoming the second-largest in global payments,” said Kim Jae-woo, an analyst at Samsung Securities Co. “Expectations are high that Apple Pay’s entry in Korea will reshape overall market structure.”

The launch of Apple Pay is expected to help expand near-field communication (NFC) infrastructure in Korea. So far, the country’s offline contactless payment market was dominated by Samsung Pay that is based on magnetic secure transmission (MST) technology. Online contactless payment service providers like Naver Corp. and Kakao Corp. are expected to jump into the offline contactless payment market.

The supply of NFC devices for Apple Pay service, however, comes with a cost burden for franchises. Only 2 percent of 2.8 million franchises are equipped with NFC terminals as of last year. A terminal costs between 150,000 and 200,000 won. Large franchises are expected to install NFC terminals first.

Commissions for Apple Pay service, which were a stumbling block for the launch, will be paid by credit card companies as not to shift responsibility on consumers or franchises.

Metaverse stocks, in the meantime, are also gaining ground ahead of Apple’s release of an extended reality (XR) device. The XR market has a big impact on industries that involve displays, cameras, and flexible printed circuit boards (FPCB), as well as games and entertainment.

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