South Korea is one of the most advanced online markets and also one of the most tech-aware countries on the planet. So what its consumers do now, it’s likely that everyone else will be doing in a few years’ time.
What makes it extremely interesting is that almost a third of smartphone users there are expected to make payments using their phones in 2018, according to analysts at eMarketer.
They say that just about 32% of South Korean consumers will be choosing to make a proximity mobile payment (ie, using their phones to pay for goods or services at a physical point of sale) this year.
Not that this puts South Korea in the lead on this front. That status belongs to China where 77.5% make payments this way, driven by the widespread use of Alipay.
But South Korea’s increasing interest in proximity mobile payment is a signal that a wider consumer market is catching on to them and that they’re likely to grow globally.
South Korea being an early adopter country isn’t exactly a surprise, of course. Its high smartphone user penetration (it’s fourth globally), its fondness for new tech, and the fact that some of the biggest tech players (Samsung especially) come from there, all add up to a population that’s frequently ahead of the curve.
That said, “adoption is far from mainstream right now,” eMarketer said, “but competition between Samsung Pay, Android Pay, LG Pay and more will continue to drive growth. [eMarketer] expects user penetration by the end of this year [to be] one of the highest in the world.”
But there are still barriers to adoption of such payments globally even in markets that are very focused on web sales and cashless payments.
Take the UK, also an advanced online shopping country where proximity mobile payments are becoming more popular, eMarketer expects only just over 22% of UK smartphone users will use a phone to pay this way in 2018.
Though double-digit growth will continue through 2020, it will slow throughout the forecast period, dipping to 8.5% by 2021. eMarketer estimates 9.2m people in the UK will use a mobile phone to pay at the POS this year, and the sector will grow by almost 17%.
But within Europe, the UK’s smartphone payments penetration rate will rank behind Norway (23.3%), Sweden (33.8%) and Denmark (38.9%) in 2018. One reason why may be the proliferation of contactless card technology. Banks in the UK began issuing such cards as early as 2007, while Transport for London’s adoption in 2014 further bolstered consumer usage.
“There’s no doubt that mobile proximity payments are beginning to get a foothold in the UK,” said eMarketer senior analyst Bill Fisher.
“But they face some tough competition that just isn’t present in many other countries. Any standard issue bank card in the UK, both debit and credit, now comes with contactless technology as standard. Mobile proximity payment providers need to convince consumers that their tech offers benefits above and beyond this well-entrenched, and incredibly convenient, method of proximity payment.”