Apple Pay rolled out but smaller stores recoil at costs

A consumer uses Apple Pay to buy a snack at Emart24 in Yongsan District, central Seoul, on Tuesday. [YONHAP]

Apple Pay is now available in Korea — but not exactly nationwide.

The service became available Tuesday on Apple devices, including iPhones, Apple Watches and Macs.

Apple Pay is currently only available through Hyundai Card and can only be used in department stores such as Hyundai Department Store, Lotte Department Store, Lotte Mall; discount supermarket chains such as Lotte Mart, Home Plus or convenience stores such as GS25, Seven Eleven and CU.

Online platforms that are now accepting Apple Pay include Musinsa shopping mall and food delivery service Baedal Minjok (Baemin).

Of affiliates under Shinsegae, only convenience store chain Emart24 supports Apple Pay. Consumers cannot use the service in Shinsegae Department Store or Starbucks.

Shinsegae has its own electronic payment system SSG Pay, launched in July 2015.

Other coffee franchises such as Paul Bassett, Twosome Place, Ediya Coffee and Mega MGC Coffee service Apple Pay.

Some 7,000 stores operated by SPC, including brands such as Paris Baguette, Baskin Robins, Dunkin’ and Caffe Pascucci, support Apple Pay.

Updates on the Hyundai Card app on March 29 will allow users to automatically accumulate points from purchases made using Apple Pay in SPC-operated stores.

Lotte GRS’s Lotteria, Angelinus and Krispy Kreme support Apple Pay.

The service, however, can not be used for public transportation, as it needs separate partnerships with companies such as T-Money and Cashbee.

It is also unlikely that the service will be widely adopted in mom-and-pop stores. Seventy two percent of private store owners out of 200 surveyed, answered that they will not service Apple Pay, according to a study by market consultant service Cash Note.

Most cited costs as the reason they would not service the payment system.

The factor hindering Apple Pay's instant nationwide service is that the payments can only be processed at stores that support near-field communication (NFC), which is a short-range wireless connectivity technology.

Devices to enable NFC are not cheap, costing around 150,000 won ($114.60) per unit.

The penetration rate for NFC devices in Korea is under 10 percent, according to Kim So-hye, an analyst at Hanwha Investment & Securities, in a report last week.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]