Samsung has reportedly looking to start costing a fee for its Samsung Pay in Korea. The company has recently notified all Korean credit card companies that it will no longer extend its free Samsung Pay service agreements with them.
The South Korean tech giant is looking to expand its business in cutthroat competition against Apple. It was the first time for Samsung to make such an announcement since the service was launched in 2015 and comes less than two months after Apple Pay kicked off its service in Korea on March 21.
Earlier, the credit card companies have really promoted the use of Samsung Pay among their credit card members for years, believing that Samsung Pay will remain free, but now the policy reportedly got changed. Credit card industry insiders estimate the number of Samsung Pay users at 16 million, saying that Samsung Electronics has the final say in negotiations with credit card issuers over Samsung Pay.
However, some reports claimed that the report regarding Samsung Pay fee remains unclear. This is due to Samsung Electronics has notified the credit card companies of so far is not that Samsung Electronics will charge fees for Samsung Pay unless the contracts are extended. “There is no decision on charging fees for Samsung Pay yet,” a Samsung Electronics representative said. Market observers expect Samsung to start specific negotiations with the credit card companies before Aug. 10.
On the other hand, Apple Pay, which launched with Hyundai Card, charges a commission on every transaction. The commission has been one of the major hurdles slowing other card operators from immediately jumping into the service as they suffer from declining sales.
