Zero Pay started in May 2019, led by Seoul. It started with the aim of lowering the transaction fee burden of small business owners, but it is still only a few in the Pay market. This is because consumers have a strong habit of using credit and debit cards, and they are not used to paying with QR code.
Can Zero Pay become the mainstream payment method by defeating credit and debit cards and competing with Naver and Kakao Pay? Webcash Vice Chairman Yun Wan-soo, who took office as the Chairman of the Korea Payment Promotion Agency (Zero Pay operating institution) in November 2019, affirmed that it is possible. “It will even serve as a highway for Pay Fintech companies,” he said.
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There are three reasons why Vice Chairman Yoon is confident that Zero Pay will survive. First is the trend of the times. The second is the government’s active support, and the third is the establishment of an ecosystem with payment fintech companies.
The trend of the times is that the frequency of use of plastic cards in the mobile era is decreasing. Instead of taking out a credit or debit card and paying for it, you pay with a smartphone. Since a smartphone becomes a payment method, there is no need to carry a card.
Vice Chairman Yoon said, “In the shortest five years, and in the longest ten years, there will be no plastic left in our wallets.” “We have no choice but to go to the software payment medium.”
It is a big advantage that the government actively supports Zero Pay in this situation.
In fact, the frequency of using Zero Pay increased this year as the government used Zero Pay to distribute’disaster subsidies’ and’local gift certificates’. In November, the total settlement transaction amount was 1 trillion won, and payments are occurring every day about 3 billion to 4 billion won. The number of affiliated stores is 700,000. Vice Chairman Yoon said, “The number appeared six months earlier than expected.”
Recently, several fintech companies are paying attention to the possibility of Zero Pay. This is because offline payment services can be provided by borrowing Zero Pay Network. Anyone can access private pay companies and provide offline pay services. This is the activation of so-called’House Pay’. Vice Chairman Yoon said, “Zero Pay is the country’s Kanpay Highway.”
House Pay is like a member-based payment method provided by each company. These include Coupang’s Coupei and Shinsegae Online Mall’s SSG Pay. These payment services can be used conveniently online, but there is a limitation that they cannot be used in offline stores. However, Zero Pay erased this limitation.
The number of house pays that have already used Zero Pay is 50-60. Overseas pay users such as WeChat Pay can also pay through the Zero Pay network. When using the Zero Pay network, there is no need to establish a separate offline network. It is thanks to the payment network that the government paid taxes.
Vice Chairman Yoon said, “Dozens of companies can use this infrastructure to their heart’s content,” he said. “Even though simple payment is slower than in China, we are more advantageous in terms of the soil where various payment services can come out.
Meanwhile, Vice Chairman Yoon thought that Zero Pay would be on track in the second half of next year. This is the section where the number of affiliates is between 1 million and 1.5 million. It is about half of the total number of card merchants.
Webcash has grown into a domestic financial software development company since the early 2000s. It is characterized by being an executive from a bank clerk. It has developed remittance networks and virtual accounts between banks and companies.
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