Regulation & ComplianceLG to overhaul Korea’s online payments industry

LG to overhaul Korea’s online payments industry

South Korea may be a technology powerhouse, but where online payments are concerned, it has lagged behind due to draconian authentication methods. All that is about to change.

South Korea may be a technology powerhouse, but where online payments are concerned, it has lagged behind due to draconian authentication methods. All that is about to change.

LG CNS, a subsidiary of LG, the country’s leading electronics company, has embarked on a new project that will see it completely redesign Korea’s internet and smartphone-based payments system.

In partnership with the popular chat app Kakao Talk, the team has spent two years developing the technology, which LG CNS says is more secure than Alipay or Paypal – a key consideration in a country where major data breaches have incurred public wrath. This enhanced security is down to the way that encrypted card and personal data is split between the LG CNS server and the user device, so that even if a hacker were to breach one side, the information obtained would be incomplete.

Called MPay, the system “received certification for highest security clearance from the financial regulator, meaning it can be used for transactions without limitations, which is a first in the country,” CEO Kim Dae-hoon told the Wall Street Journal. This makes MPay “the only online payment software in South Korea that has gotten this approval.”

According to Kim, major card providers such as Samsung, KB and Hyundai have already agreed to partner with MPay, as have the malls run by GS, CJ, Hyundai and Lotte. Kim believes that the next five years will spell the end of multilayer payment practices such as the archaic ActiveX, a 1990s Microsoft product that internet shoppers must often download to proceed, simplifying and increasing the popularity of online purchases in South Korea.

By partnering with Kakao, Kim says that the project has been given a huge head start. “We’ve, of course, tried selling the service on our own. But it didn’t work,” he said. “People aren’t used to having to download a separate app to use as their mobile payment tool. We needed a big user base to start with, which Kakao Talk had. And now, anyone on the Kakao app will have easy access to our mobile payment service.”

 

 

Related Articles

Which transaction monitoring software is right for my institution?

Regulation & Compliance Which transaction monitoring software is right for my institution?

1m Elaine Dorkham
Bringing cryptocurrency to the front line  

Payments Bringing cryptocurrency to the front line  

4m Karen Vickers
China’s regulatory changes stimulate international interest

Asia Pacific China’s regulatory changes stimulate international interest

5m Michael McCaw
Treasury TV: Yeng Butler compares US and European MMF reforms

Compliance Treasury TV: Yeng Butler compares US and European MMF reforms

5m Victoria Beckett
AccessPay offers free tool to help corporates utilise PSD2

Payments AccessPay offers free tool to help corporates utilise PSD2

5m GTNews
Many treasurers juggle increased GDPR burden with business restructuring

More News Many treasurers juggle increased GDPR burden with business restructuring

6m Victoria Beckett
The arrival of PSD2: views from the market

Banking The arrival of PSD2: views from the market

6m Victoria Beckett
PSD2: dull name, but seismic effect

Clearing & Settlement PSD2: dull name, but seismic effect

6m Alex Kwiatkowski