Shulou(Shulou.com)11/24 Report--

CTOnews.com, May 14 (Xinhua)-- Samsung is changing its overall strategy around Samsung Pay after Apple launched the Apple Pay in South Korea.

Samsung's mobile payment service is currently free to consumers and credit card companies. However, Samsung plans to charge credit card companies in a way similar to Apple.

Samsung Electronics has informed all credit card companies in South Korea that it will no longer extend its Samsung Pay service free of charge, Business Korea reported. Samsung Pay was first launched in 2015 and has always been a free service for credit card companies (banks) and consumers (Galaxy mobile phone users). In the future, however, Samsung will start charging South Korean credit card companies a nominal fee. The strategy is expected to expand to all markets around the world that can use Samsung Pay.

Credit card companies say they have vigorously promoted Samsung Pay to more than 16 million users over the past eight years and believe it will remain free, the report said. Now they are blinded by Samsung. In order to cut costs, they may reduce the benefits offered to end users. Although the South Korean government says the contract between companies is autonomous, it may intervene if fees are passed on to consumers.

Financial industry insiders speculate that Samsung's decision is closely related to the recent debut of Apple's Apple Pay in South Korea. "after Modern Card, other card companies are planning to launch Apple Pay, so Samsung Electronics can no longer wait and see," said one credit card company executive. "I think Samsung Electronics thinks,'if credit card issuers pay for Apple Pay, why don't credit card issuers pay for Samsung Pay?'"

Some analysts believe Samsung is trying to increase the fees paid by credit card companies that have not yet adopted Apple Pay to put pressure on them in the negotiations. A representative of Samsung Electronics said: "No decision has been made yet to charge Samsung Pay." Market watchers expect Samsung to begin specific negotiations with credit card companies by Aug. 10.

CTOnews.com Inquiry learned that Samsung has also taken a series of measures to fight Apple's Apple Pay in South Korea, such as Samsung Pay has partnered with Naver Pay to enable users to make online payments through Samsung Pay. Samsung also plans to activate Samsung Pay on South Korea's Galaxy Watch to compete with Apple Pay.

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