A process of linking QR code payments between South Korea’s Zero Pay and WeChat Pay, which is the most popular mobile payment service in China, has hit its stride.
According to the IT industry and the financial circle on Thursday, a Korea agency for simple payment that is in charge of the Zero Pay mobile payment service selected KIS Information & Telecommunication as the consigned business operator that will manage an intermediary service for Zero Pay and WeChat Pay. KIS Information & Telecommunication has started working on linking the two mobile payment services.
When they are finally linked, a Chinese consumer will be able to use WeChat Pay to make a payment at a store in South Korea that supports Zero Pay as early as this second half. Afterwards, cross-border payments will take place where a South Korean consumer can use a Zero Pay QR code to make a payment at a store in China that supports WeChat Pay. In a medium to long term, the agency will look to link Zero Pay with QR code payments used in South-East Asian countries and expand the Zero Pay mobile payment platform globally. China-based Tencent and the city of Seoul are also nearing a MOU (Memorandum of Understanding) exchange regarding linkage between the two QR code payments.
“Because QR code payment systems are different between South Korea and China, we need to work on having them compatible with each other.” said a spokesperson for the agency. “We have begun a process of developing a platform where Zero Pay and WeChat Pay can be mutually compatible.”
Although amounts of consumption by Chinese tourists have plummeted due to an aftereffect of COVID-19, there will be many demands for Zero Pay once QR code payments between Zero Pay and WeChat Pay become compatible. Nearly 580,000 stores in South Korea support Zero Pay and it is likely that there will be more than 600,000 stores that support Zero Pay sometime next month.
“Although amounts of consumption by foreign tourists have dropped greatly due to an aftereffect of COVID-19, amounts of consumption through Zero Pay will increase drastically once cross-border payments between South Korea and China take off.” said Lee Geun-joo who is the director of the agency. “When cross-border payments are established, Chinese tourists will start purchasing products from Chinese brands at stores that support Zero Pay more so than major duty-free shops.”
It is expected that foreign tourists will begin to spend more at small stores as a result of a linkage between Zero Pay and WeChat Pay. As a result, the agency will look to have Zero Pay compatible with foreign QR code payment services.
When that happens, South Korea-based electronic financial businesses will be able to enter foreign markets through the Zero Pay platform.
However, the actual timing of linking the two mobile payment services will vary as a more elaborate development process needs to take place at the same time. The agency is hoping to introduce a linked service in this fall.
The agency is also preparing to have online and mobile Zero Pay payments available in the second half when the official certificate system is expected to be thrown out due to amendments to the Personal Information Protection Act, the Act on the Promotion of Information and Communications Network Utilization and Information Protection, and the Act on the Use and Protection of Credit Information.
Naver Financial, NHN Payco, Galaxia Communications, Coocon, Korea Information & Communications, Lotte Members, eBay Korea, 11STREET, and Finnq have currently joined as companies that will support Zero Pay. There are also discussions taking place about expanding online Zero Pay payment. During the second half, KT, EB Card, Tmonet, and KakaoPay are expected to participate in an online Zero Pay project.
As more consumers are purchasing products through “untact” methods, Zero Pay that has been lacking stores that support its platform and stigmatized as a bureaucratic pay is expected to take a new turn. It is benefiting especially as a means for stimulus checks and mobile gift cards. The agency is currently discussing with the city of Seoul and other major local government groups about issuing additional mobile gift cards this year.
Staff Reporter Gil, Jaesik | firstname.lastname@example.org