LG Electronics is working with Shinhan Card and KB Kookmin Card to enter mobile payment market. It has practically challenging Samsung Pay by establishing a new partnership with leading card companies.

According to financial industries and IT industries on the 18th, LG Electronics exchanged memorandum of understanding (MOU) with Shinhan and Kookmin Card and will start LG Pay service in early 2016.

LG Electronics once announced during an event for its strategic Smartphone ‘V10’s release that it was preparing for payment system. It already finished applying for trademark of ‘G PAY’ in South Korea as well as the U.S.

Until now, no one knew whether or not LG Electronics was going to enter mobile payment markets. However after Samsung Pay was released, it started contacting many financial companies under table and was feeling about right timing to enter mobile payment market. Fact that it applied for trademark in the U.S. means that it will start doing its mobile payment business by targeting the whole world in mobile payment markets that are worth hundreds of billion dollars.

It started contacting South Korean financial companies in early this year and while it was exchanging information about mobile payment markets with couple card companies including BC Card, it was also analyzing its competitors’ payment platforms.

It is known that there is a high chance that LG Pay will choose ‘White Card’ as its payment method. It connects its application to a separate plastic card that is given by LG Electronics, gathers information of current cards into an application, and makes payment with a card that is provided . Although it needs a separate hardware (HW) unlike Samsung Pay’s Magnetic Security Transmission (MST) and Apple Pay’s Near-Field Communication, its advantage is its versatility. Especially it can be used on most of LG Electronics’ Smartphones as an app method. Industries are expecting that there will be an expansion of base in mobile payment markets because not only it can be applied on V10 and G4, it can also be applied on older models such as G3, G2, G Pro2 and others. Some industries are predicting that it can also be used on other companies’ Smartphones with Android OS such as Samsung Electronics considering that it is an app method.

It is estimated that it will start its service in next year because it still needs to go through systematic preparations such as doing demonstrations of its service and others.

“Timeline for actual commercialization and detailed payment methods are still not decided yet.” said an employee from LG Electronics with emphasis. “After discussing with card companies, then we will prepare corresponding services.”

Although Shinhan Card and Kookmin Card also could not officially confirm whether or not they made partnerships with LG Electronics, they did acknowledge that they are participating in LG Pay. “Because leading card companies are already participating and other financial companies will likely to join soon, there will be a new form of mobile payment solution in markets real soon.” said a person associated with card industries.

Staff Reporter Gil, Jaeshik | osolgil@etnews.com