Telecom operator KTF and credit card giant Shinhan Card have established a joint venture to launch a mobile phone payment system in the second half of the year. The two firms announced Monday that they will invest 1 billion won each to establish the joint venture, tentatively named Mobile Credit. Shinhan will have 50 percent plus one shares, and will appoint the chief executive officer. KTF will pay the rest, and appoint the chief financial officer. Korean mobile firms had launched various mobile payment systems in the past, which used either infrared beams or short-distance radio waves. But none was very successful, due to cumbersome devices and different technological standards between companies. Shinhan and KTF say they will be different. The joint venture will be the first step of the two firms' efforts to seek hybrid business models of finance and telecommunications, they said. They also want to develop the partnership by holding a regular meeting of executives on a finance and telecom cooperation committee. ``Cooperation with Shinhan Card, the largest credit card company in Asia, is a convergence business that can offer what the customers need most,'' Cho Young-chu, president and CEO of KTF, said in a statement. ``It is also an occasion that can change the financial lifestyle of customers.''Mobile Credit will issue its subscribers a credit card and a USIM (universal subscriber
identify module) chip. They can make payment at shops and restaurants either with the credit card or with a USIM-inserted mobile phone. The payment is deducted from the Shinhan credit card account. ``We will stop issuing the plastic card once the USIM readers are widespread,'' said Jung Woon-gyu, leader of the project. Shinhan Card is the largest credit card company in Korea, fully owned by Shinhan Financial Group. It boasts more than 13.3 million customers and 2.1 million member shops. KTF is the second largest mobile service operators in Korea after SK Telecom. It is one of leading developers of mobile payment systems in Asia.
The company is also the leader of the third-generation telecom service in Korea, which uses the USIM chip. More than 4.8 million are using KTF's third-generation service.
identify module) chip. They can make payment at shops and restaurants either with the credit card or with a USIM-inserted mobile phone. The payment is deducted from the Shinhan credit card account. ``We will stop issuing the plastic card once the USIM readers are widespread,'' said Jung Woon-gyu, leader of the project. Shinhan Card is the largest credit card company in Korea, fully owned by Shinhan Financial Group. It boasts more than 13.3 million customers and 2.1 million member shops. KTF is the second largest mobile service operators in Korea after SK Telecom. It is one of leading developers of mobile payment systems in Asia.
The company is also the leader of the third-generation telecom service in Korea, which uses the USIM chip. More than 4.8 million are using KTF's third-generation service.
By Cho Jin-seo Staff Reporter
Summary>
Telecom operator KTF and Shinhan Card have established a joint venture to launch a mobile phone payment system in the second half of the year. Shinhan will have 50 percent plus one share, and will appoint the CEO. KTF will pay the rest, and appoint the CFO. Mobile Credit will issue its subscribers a credit card and a USIM (universal subscriber identify module) chip. They can make payment at shops and restaurants either with the credit card or with a USIM-inserted mobile phone. The payment is deducted from the Shinhan credit card account.
Telecom operator KTF and Shinhan Card have established a joint venture to launch a mobile phone payment system in the second half of the year. Shinhan will have 50 percent plus one share, and will appoint the CEO. KTF will pay the rest, and appoint the CFO. Mobile Credit will issue its subscribers a credit card and a USIM (universal subscriber identify module) chip. They can make payment at shops and restaurants either with the credit card or with a USIM-inserted mobile phone. The payment is deducted from the Shinhan credit card account.
Opinion>
Today, people always carry their cell-phone even when they go out for minutes. It is very inconvenient to carry a cell-phone in one hand and a wallet in the other hand. This is the opportunity of Mobile Credit. But, none was very successful. Why didn’t they success? What’s the problem? And, what’s the solution?
First, people don’t need Mobile Credit when they go out faraway or for a long time because they have to carry their wallet for identification. To solve this problem, KTF and Shinhan have to make identification possible through subscriber’s cell-phone so that one cell-phone can function as a phone and a wallet.
Second, it is important to spread card readers, especially, the shops near the houses. But, in Korea, I have hardly seen card readers. It will be the best way to spread card readers for City Pass first because many people feel uncomfortable when they find their wallet in the bag for bus fares. But, because many Koreans put their cell-phone in the pocket or carry in their hands, they can find it easily.
Third is the problem of missing card. When customers use their plastic credit card, they don’t prove their identity. Mobile Credit doesn’t take any steps for identifying also. Although people check their cell-phone more frequently than wallet, we think that the possibility of loss of cell-phone is more than wallet. KTF and Shinhan should straighten these customers’ worries out. How about ‘Lock Card function’? If you push the Lock Card function key for seconds, the Cell-phone can’t function as a card. And then, when you want to use Mobile Card, you must push the secret access number. And, they should make easy to stop subscriber’s card easily, even on weekends. Fourth, they should integrate the standard of technology and tools. One of the reasons of fail in this market was the problem of integrating.
Despite of all these problems, Mobile Credit market has enough possibility to change our life style, if Shinhan and KTF solve these problems.
Today, people always carry their cell-phone even when they go out for minutes. It is very inconvenient to carry a cell-phone in one hand and a wallet in the other hand. This is the opportunity of Mobile Credit. But, none was very successful. Why didn’t they success? What’s the problem? And, what’s the solution?
First, people don’t need Mobile Credit when they go out faraway or for a long time because they have to carry their wallet for identification. To solve this problem, KTF and Shinhan have to make identification possible through subscriber’s cell-phone so that one cell-phone can function as a phone and a wallet.
Second, it is important to spread card readers, especially, the shops near the houses. But, in Korea, I have hardly seen card readers. It will be the best way to spread card readers for City Pass first because many people feel uncomfortable when they find their wallet in the bag for bus fares. But, because many Koreans put their cell-phone in the pocket or carry in their hands, they can find it easily.
Third is the problem of missing card. When customers use their plastic credit card, they don’t prove their identity. Mobile Credit doesn’t take any steps for identifying also. Although people check their cell-phone more frequently than wallet, we think that the possibility of loss of cell-phone is more than wallet. KTF and Shinhan should straighten these customers’ worries out. How about ‘Lock Card function’? If you push the Lock Card function key for seconds, the Cell-phone can’t function as a card. And then, when you want to use Mobile Card, you must push the secret access number. And, they should make easy to stop subscriber’s card easily, even on weekends. Fourth, they should integrate the standard of technology and tools. One of the reasons of fail in this market was the problem of integrating.
Despite of all these problems, Mobile Credit market has enough possibility to change our life style, if Shinhan and KTF solve these problems.
20600613 Jeon, Hyejin
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