Samsung Electronics has started pushing credit card companies with a scheme of deducting fees. The reason behind this groundwork measure since Apple Pay’s arrival in Korea. Notably, the Hyundai card launched the Apple Pay service is act as a medium to pay a fee to Apple. While Samsung Electronics will offer the same protocols to credit card companies that use Samsung Pay.
As per recent industry news, Samsung Electronics highlights its positions to major credit company executives. They instruct to charge fees for Samsung Pay-based payments as a consequence of Apple Pay’s launch.
Apple got fees from credit card company partners that are associated with Apple Pay. Also, the Hyundai Card’s fees for Apple Pay are 0.15 percent of the transaction amount. Samsung Electronics has not charged any fees for Samsung Pay. Now they tend to start, while the exact official statement is yet to come.
However, card companies have already expressed their dissatisfaction. “The Apple Pay service has led to additional unexpected costs,” said a card company representative, who asked not to be named, “which will inevitably lead to a decrease in cardholder revenue.” “There is a saying that Apple Pay has a fee, so the more customers use it, the more the card loses,” said another, adding, “We will negotiate with both sides (Samsung and Apple) to see what is beneficial for customers and us.”
Although various credit card companies have a distinct place in the market, Hyundai Card presumes to be hit hard. And since, Apple Pay partner, Hyundai pays fees for Apple Pay. Therefore, the probability is that Samsung pressurizes Hyundai cards in order to pay fees to Samsung Pay as well.
“Samsung Pay is one of many payment services, so it will not be easy to suddenly cancel the contract with Hyundai Card,” a Hyundai Card representative said. “We will respond according to our existing policies.”
Samsung Card is a Samsung Group affiliate, so it is highly unlikely to join Apple Pay. “If Samsung Electronics makes a proposal to charge fees for Samsung Pay, we will closely study it,” said a Samsung Card representative, adding, “We will consider whether to introduce Apple Pay in consideration of situations in the market.”
Apparently, the key factor is the timing of Samsung Pay’s renewal agreements with card companies. On the other hand, Samsung Electronics is predicted to renew its contract with card companies from May to August. While the company is assumed to discuss with card companies from May to August. Thus, companies are forecasted to initiate discussions with card companies in May on the prior node.
“Samsung Pay’s conversion to a paid service is likely to be based on market shares of credit card companies,” said Seo Ji-yong, professor of business administration at Sangmyung University in Seoul. “In the future, credit card companies other than Samsung Card may check and compare customer preferences for Apple Pay and Samsung Pay and choose between the two. So it remains to be seen what results Samsung Electronics will produce in the upcoming renewal negotiations.”
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