Apple Pay patent and contactless payment service technology

 

Recently, the news that Apple Pay service will be launched in Korea has been drawing attention from many iPhone users in Korea.

▲apple.com

Apple Pay has been already in service in 63 countries but why is not in Korea?

The reason is the difference in how the payment service works. Then what’s the difference? MST and NFC are the representative method for the contactless payment service. Samsung Pay uses MST and Apple Pay uses NFC. In Korea, most card payment affliates use the MST method, so Apple had no choice but to be lukewarm about entering into Korean market.

MST vs NFC

MST is an abbreviation of Magnetic Secure Transmission. Simply put, payment is made by detecting changes in the magnetic field that occur during payment by swiping or inserting a physical card. The technology below is a patent for a payment method that Samsung applied for in 2015. Samsung has developed a technology that enables payment simply by brining the device close to the card payment terminal by installing MST and NFC modules in its own smart devices, including the Galaxy.

▲wipsglobal.com> KR10-2371943
Titled "Handheld electronic device capable of magnetic field communication and payment method using the same"

The advantage of MST technology is that it can respond to NFC payments. With installating the NFC module, payment is settled smoothly even at NFC-based payment terminal, although it’s a very small percentage.

NFC is for Near Field Communication, which means short-range wireless communication. In Korea, this is the method for transportation cards. This technology can exchange data over a short distance using frequency, it has advantages over MST in terms of security, recognition and speed. Currently, most overseas countries including the US and Europe take NFC only and Apple Pay and Google Pay takes also NFC methods.

▲wipsglobal.com> US10019699
Titled "Method for adjusting near field communications circuitry during mobile payment transactions"

In 2014, Apple applied for a patent for a technology that enables fast payment when a smart device is close to a card payment terminal using frequency, and this has become the basic principle of Apple Pay.

 Although the advantages of the NFC method are clear, the current penetration rate of NFC payment terminals in Korea is just around 5%, and there is a possibility that it will be a half-service if the payment infrastructure, including the supply of terminals, is not properly established for Apple Pay, where NFC terminals are essential. In addition, Korea uses its own communication standard (KLSC), so there is a problem that card companies that should follow the Apple Pay standard (EMV) have to pay huge fees to Apple.

▲clipartkorea.co.kr

Recently, Apple prepared another hidden card. The ‘Apple Gift Card’ is what it is. Apple applied for the trademark of APPLE GIFT CARD in Korea. It is expected that it will start a full-fledged invasion to Korean market.

▲intomark.com> apple gift card
*intomark : trademark database of WIPS Co.,Ltd

Now that non-contact payment service, which allows payment anywhere with just a mobile phone, has become the new normal, Apple Pay is expected to contribute to enhancing consumer convenience. However, I hope that Apple Pay can make a soft landing in the direction of resolving problems accumulated through mutual developmental consultations and improving the payment service environment.