China’s biggest payment business called Union Pay International (UPI) is joining hands with Samsung Electronics and regularizing Samsung Pay’s entry in China. If UPI, which is currently issuing more than 5 billion cards globally, works together with Samsung Pay, it is expected that there will be great synergy effect in China that is biggest mobile battlefield after the U.S. and Europe.
“We are joining hands with Samsung Pay, which is a new payment settlement method, and planning to use it within China also. Although we are currently switching system, but there aren’t too any major problems with the process.” said President Cai Jianbo of UPI at a meeting with South Korean reporters that was held in UPI Headquarters in Shanghai on the 31st of last month.
Union Pay, which was established in 2002 for payment settlement business in China, established its affiliate UPI in 2012 to be in charge of international business.
Within 3 years from its establishment, UPI issued more than 5 billion cards and built payment system in about 150 countries. It rapidly grew as an international brand card company that has about 26 million affiliated stores and 1.9 million ATMs.
Importance of transaction using magnetic card in China is low, but it is high for transaction using IC card. Because importance of NFC-based payment is increasing, Samsung Electronics had been contacting with Union Pay under the table to make Union Pay as its cooperative company. It is known that these two companies are discussing about a plan to link Samsung Pay to NFC payment infra, and there is a high chance that Samsung Pay payment will occur through other methods rather than South Korea’s magnetic security transmission (MST) method. Samsung Electronics is currently making security token with Union Pay, and it seems that its launch in China will be either end of 2015 or early 2016.
UPI is strengthening its investment in South Korea’s mobile payment infra and is out to preoccupy markets. If one is KT customer, he or she can apply for Union Pay Card through mobile. Union Pay service called Quick Pass, which can be used by just touching this card onto a terminal, can be used at Dongdaemun Gate Duta Shopping Mall, GS convenience stores, and others. Accumulated number of Union Pay cards that are issued in South Korea surpassed 14 million.
“South Korea is one of the markets where variety of Union Pay’s new technologies is first introduced. Quick Pass that agreed to use NFC payment method was also introduced in South Korea after Hong Kong and Macao.” said President Cai.
Although it formed a competitive structure with China’s payment business Ali Pay, it clearly showed that it is working with Samsung Pay.
“Although we used a lot of money to build 6 million Quick Pass terminal systems globally, we were able to use Samsung Pay without any modification because it uses same standards as Quick Pass. It will be a great help for us to pull through competition in mobile markets here and on.” said President Cai.
“There is a high chance that Union Pay Card will be installed in Samsung phones and go with IC-based NFC payment. We are currently discussing about Fall-Back method where one can make a MS transaction with IC Card.” said one person associated with Samsung Pay’s cooperative company.
Because Apple Pay also decided to enter China in second half of this year, it is inevitable that Samsung and Apple will have fierce battle to preoccupy Chinese market.
Staff Reporter Gil, Jaeshik | osolgil@etnews.com