[The Future is Now] Gov’t plans own payment systemWith the growing popularity of digital payment systems, the government has started a project aimed at launching an integrated mobile payment system for small merchants, the latest push to lift the commission fees linked to electronic payments.
The system will go into test operation in December and then officially launch in January, said the Ministry of SMEs and Startups and the Financial Services Commission.
“We aim for Jan. 1 as the launch date,” said Hong Jong-haak, the minister of SMEs, on Friday, “There is no major problem going ahead with the plan.”
Tentatively named Zero Pay, the system will be built into the apps of partnered banks and payment platforms and use a QR scanning method.
“When a user pays at a restaurant or shop that has signed an agreement with Zero Pay with one of the existing applications, the system will work,” said an official at the small business policy division at the SMEs Ministry.
The merchant will then be charged a pre-set fee by the government. As the name of the system suggests, the ministry is trying to charge no fees or as close to zero as possible. The agency, however, has yet to announce a specific rate.
Partnered companies include Naver Pay, Kakao Pay, BC Card, Nonghyup Bank, KEB Hana Bank, Shinhan Bank and Woori Bank, which means their users get access to the Zero Pay on each platform.
The city and provincial governments of Seoul, Busan, Incheon, South Gyeongsang and South Jeolla have also joined the initiative to include mom-and-pop stores in their regions.
Associations representing small enterprises and convenience stores also struck a deal with the SMEs Ministry.
To attract shoppers to Zero Pay, the ministry promised a 40 percent tax break on each purchase.
The system is also targeting Chinese tourists visiting Korea as the agency plans to sign a partnership with Alipay and WeChat Pay, the two dominant payment operators in China, by sharing the QR code program.
Choi Jong-ku, head of the Financial Services Commission, said that 80 percent of retail shops accepting cards will benefit from the project.
Analysts suspect that user acceptance will be key to the success of Zero Pay.
“It is too early to determine the prospects of Zero Pay,” said Yeoh Yun-ki, an analyst at Korea Investors Service, a credit rating agency affiliated with Moody’s.
“Consumer response will decide the success of Zero Pay. The lower commission rate for merchants is an irrelevant factor for users to choose a payment method,” Yeoh said, “If the credit cards they already use offer better benefits, they will stick with it.”
BY PARK EUN-JEE [firstname.lastname@example.org]