In an unprecedented move, South Korea's telecommunication regulator is partnering with mobile-phone operators and card networks to test a near field communication-based mobile-payment system on the country's busiest shopping street.
For three months beginning Nov. 24, the Myeong-dong area in Seoul will be made a trial zone for NFC-based mobile payments, according to a spokesman for the Korea Communication Commission.
Under the pilot, visitors with NFC-enabled mobile phones would be able to make credit card payments at more than 100 stores and restaurants along the street by waving their phones across NFC readers, he says.
To further promote NFC payment, the retailers will offer discounts and loyalty points on their purchases, the spokesman says, adding that a mobile application for Android phone users also will be released for the pilot.
"This mobile app would include the list of participating merchants, their special deals and discount coupons," he says. "It will be available in Japanese and Chinese as well since we get many tourists from Japan and China on this street."
The pilot is the first initiative under South Korea's Grand NFC Global Alliance in which the regulator, three telcos, credit card networks, phone manufacturers and other providers have joined to promote contactless payments.
These include mobile operators SK Telecom Ltd., KT Corp. and LG U+, and card networks Hana SK Card Co. Ltd., BC Card Co. Ltd., Shinhan card Co. Ltd., MasterCard Worldwide and KB Kookmin Card.
Among the participating handset manufacturers are Samsung Telecommunications and LG MC Co. Telco service billing providers such as Danal Co. Ltd. and Galaxia Communications also are part of the NFC alliance.
The regulator eventually plans to expand NFC payments to major supermarket chains, gas stations and quick-service restaurants over the coming months, the spokesman says.
"Next year, we will also carry out pilots for NFC-based mobile transit cards for use on public transport networks and also for payments at airports and other retail locations," he says.