Smartphone manufacturer LG has partnered with South Korean credit card companies Shinhan Card and KB Kookmin Card to develop a mobile payment system.
LG will launch LG Pay in South Korea first. There haven’t been any announcements of an international launch to date.
Technology-wise, Apple Pay and Android Pay use near-field communication (NFC) capabilities, which are basically weak radio signals, within phones to transmit data from the personal device to the vendor device.
Samsung uses magnetic secure transmission (MST), which emits a magnetic signal similar to the magnetic strip on a traditional credit or debit card. This actually makes it more versatile; it can interact with many card terminals that haven’t been upgraded to accept NFC signals.
It isn’t known yet which style of payment LG Pay will use. Either way, as more retailers and vendors add mobile payment capabilities to their outlets, LG will be able to latch onto the infrastructural developments that have been paved by its predecessors.
The payments space as a whole has its work cut out for it in creating confidence in a mobile payment system.
A recent study from Research Now found that 51% of consumers favor an app from their financial institution instead of a third party, like LG Pay or Apple Pay. About 70% of those who don’t use their mobile devices to make in-store purchases cited identity theft, payment fraud and privacy concerns as their primary reasons for not adopting the technology.
On the other hand, 17% of respondents in the same survey said they would make the leap to mobile payments this holiday season.