Zero Pay test launched, 15 apps enabled for the serviceSeoul announced Thursday the test launch of Zero Pay, a payment system that reduces processing fees to zero, or near zero, for small merchants.
Zero Pay is a mobile transaction system that integrates with existing commercial banking and payment apps. Consumers can use it to pay for goods by scanning Zero Pay QR codes at participating merchants.
On Thursday, 11 mobile banking apps, including KB Kookmin’s Liiv and IBK’s i-ONE Bank, and four standalone payment apps, including Naver Pay, were updated with the new Zero Pay feature. A total of 24 banks and payment companies support Zero Pay transactions. Between 20,000 and 30,000 stores have already signed up.
Once consumers scan the QR codes with their apps and enter the amount they want to pay, the sum will be transferred from their bank account to the account of the merchant associated with the QR code.
Some 26 fast food and convenience store franchises, including Paris Baguette, Ediya Coffee and GS25, announced they are or will soon begin accepting Zero Pay at their stores. Over 85 percent of stores at the Express Bus Terminal at Banpo-dong in southern Seoul and at Yeongdeungpo Station’s underground shopping plaza in western Seoul are using Zero Pay.
Merchants with annual sales below 800 million won ($712,400) pay zero processing fees for Zero Pay purchases. Merchants with annual sales between 800 million won and 1.2 billion won pay 0.3 percent of the purchase value, while those selling 1.2 billion won or more pay 0.5 percent.
The government is granting tax deductions equal to 40 percent of purchases customers make with Zero Pay. The tax deduction cap for regular credit card purchases is 15 percent.
The government plans to launch the official Zero Pay service next March. A feature will be added: Merchants will be able to accept payments by scanning app QR codes or barcodes.
“Zero Pay is not only expected to relieve the financial burden of business owners who have had to pay millions of won [in fees], but also create a healthy consumer culture,” said Seoul Mayor Park Won-soon.
BY KIM EUN-JIN [email@example.com]