Korea Mobile Payment Institute is pursuing linking Zero Pay, which is a payment platform exclusively for small business owners, and China’s biggest payment platform WeChat Pay. By doing so, Chinese consumers will be able to purchase products at stores that support Zero Pay by using a store’s Zero Pay QR code. In a medium and long term, Korea Mobile Payment Institute is also going to push for “cross-border (transaction between two countries)” that will allow Zero Pay users from South Korea to purchase products in China using the same app. Not only Zero Pay app will be linked to foreign QR payment platforms such as WeChat Pay and Alipay, but it will also expand throughout the global online payment market. It is also expected that the status of commercial banks in direct payment will be improved.
According to the IT and financial circles on June 11, Korea Mobile Payment Institute that manages Zero Pay started a process of selecting a business that will be entrusted with managing a payment intermediary service for Zero Pay and WeChat Pay.
“We are planning to link Zero Pay with foreign mobile payment apps by using infrastructures that support Zero Pay and push for diversification of Zero Pay.” said a Korea Mobile Payment Institute official. “We finished gathering potential businesses and we are currently in a selection process.”
While consumption by Chinese tourists in South Korea has plummeted due to the aftereffect of COVID-19, there is a very high chance that compatibility between two platforms through QR code will promote consumption by Chinese tourists at local and small businesses.
Korea Mobile Payment Institute will finish the selection process as quickly as it can and develop necessary merchant presented mode (MPM) and consumer presented mode (CPM) for the two apps.
Selected business will develop and manage a payment intermediary service that corresponds to WeChat Pay’s standards, develop a process that deals with payment cancellation (refund) and system cancellation (network cancellation), and develop a process that handles and manages current stores that support WeChat Pay.
By doing so, Zero Pay app users can use stores that support WeChat Pay through direct payment and mobile gift card while Chinese tourists can make QR code-based payments at stores that support Zero Pay app. In addition, discussions about linking KakaoPay and Alipay also started to take place.
Korea Mobile Payment Institute decided to create a separate statistics system for accurate settlement between Zero Pay and WeChat Pay and link and manage a tax invoice issuing system.
Because there are already South Korean companies that specialize in WeChat Pay settlement, there is a good chance that a process of linking Zero Pay infrastructures to WeChat Pay will be done in a short period of time.
However, because it is likely that QR linkage will be only available through MPM at the moment, many discussions between businesses are still needed.
It is expected that online payments made by Zero Pay app will expand greatly in the second half. Zero Pay app has been used by offline stores. A process of linking Zero Pay app to e-commerce transactions and delivery apps is currently in initial stage.
Korea Mobile Payment Institute’s plan is to maximize utilization of mobile gift cards and expand utilization of Zero Pay app online as the world is getting ready to face contact-free era.
To achieve this plan, it recently started having discussions with top delivery app service providers.
Through its discussions with delivery app service providers, it informed them that it will be possible to pay delivery fees through Zero Pay app or make payments through mobile gift cards.
Because eBay Korea, 11Street, and KakaoPay stated their intention to participate in Zero Pay, there is a good chance that a process of linking Zero Pay app to online payments will gain momentum.
If Zero Pay app expands towards the online payment market and other cross-border linkages with the private mobile payment market at the center, its use as an account-based direct payment will be much greater. Competitive edge of banks that do not fare well against credit card companies within the payment market will be strengthened more because there is a possibility that Zero Pay app will be widely used very rapidly if it can be used to sell mobile gift cards and make account-based payments. It is expected that the status of commercial banks as various payment platform providers for corporate Zero Pay, voucher Zero Pay, and online Zero Pay payments will be strengthened.
“We still have tasks that we need to resolve since the process of linking two different systems for cross-border is still in its initial stage.” said a Korea Mobile Payment Institute official. “Because a fairness issue can arise with private companies regarding linking Zero Pay app to delivery service apps and online payments especially, we are planning to pursue such plan after gathering various opinions.”
Staff Reporter Gil, Jaesik | firstname.lastname@example.org