All of South Korean banks such as Nonghyup, Shinhan and others will link their ATMs to Samsung Pay. Starting from next year, all of ATM withdrawals and debit payments at retail stores will be possible through Samsung Pay regardless of kinds of banks. Because Samsung Pay is planning to supply mobile wire transfer service without commission, new cooperation system between banks and Samsung Electronics is planning to be set up.
According to financial industries on the 22nd, South Korean commercial banks are pushing for linkage process with Samsung Electronics so that payments at retail stores and ATM withdrawals are possible through Samsung Pay without a credit card or a debit card.
Currently only Woori Bank supports ATM withdrawals through Samsung Pay.
For the first time in the world, Woori Bank and Samsung Electronics released Woori Samsung Pay that allows withdrawal and payment with a maximum limit of $431.85 (500,000 KRW) in August. Because exclusive service contract with Woori Bank is to be finished in March of 2016, Samsung Electronics is pushing for Samsung Pay linkage process with large banks.
It is known that even local banks are planning to participate as well.
“Number of Samsung Pay users is continuously increasing and we are also examining a method that will start wire transfer service and not just ATM linkage.” said a high-ranking official from a bank. “Other banks are going through a same process and continuously working on it under water.”
“Because Samsung Electronics first put out an offer, we finished internal discussion that will lead to linkage with service.” said a different affiliated person from a different bank. “Because separate investments are needed, Samsung Pay’s deposit and withdrawal services at all of banks’ ATMs and payments at retail stores will be possible in early 2016.”
While Samsung Electronics has superiority in offline payments at retail stores, Samsung Pay’s versatility will be even bigger if it is linked to all of South Korean banks’ ATMs. It will work as a catalyst that changes bank customers to Samsung Pay customers.
Samsung Electronics is also planning to work on simple mobile wire transfer service without a commission by using bank accounts.
South Korea’s major banks recently went into negotiation with Samsung electronics with release of simple mobile wire transfer service on a line. Although there are some disagreements between them, it is known that they agree on simple wire transfer service using Samsung Pay along with simple payments. However since wire transfer function without a commission can have harmful effects on FinTech businesses that already started this service, they are mediating on a type of a platform.
Samsung Pay, which preoccupies superiority in offline payment markets with MST (Magnetic Security Transmission) method, is able to secure more competitive edge in Pay competition as it grafts new method of service and has banks’ rights.
Opening of banks’ ATMs has a big meaning because financial industries, which had been focusing on improving image of brands rather than creating profit through Samsung Pay, now recognize Samsung Pay as next-generation financial platform.
If banks cooperate with Samsung Electronics in wire transfer service, which banks receive big profit of commission from, significant change in ‘wire transfer market’ that has been dominated by banks for many years will be inevitable.
“There is a high possibility that Samsung Pay will become a total platform that has all of financial services if simple wire transfer function is even included to Samsung Pay.” said an employee from a bank that is working with Samsung Electronics. “Current wire transfer service can also be used by linking it with Samsung Pay.”
Staff Reporter Gil, Jaeshik | osolgil@etnews.com