Apple Pay Shows Up Clunky Mobile Payment in Korea

Apple Pay, which enables iPhone 6 users to pay for goods using just their phones, is spreading far more quickly than expected and can now be used in 220,000 stores across the U.S. It's been less than a month since the service was launched, but Apple Pay already accounts for half of all transactions at McDonald's 14,000 outlets in the U.S.

The New York Times reported that Whole Foods, the high-end grocery chain, processed more than 150,000 Apple Pay transactions.

Thanks to Apple Pay, mobile payment in the U.S. is growing. Similar services by Softcard and Google Wallet have also seen a surge.

Apple Pay is simple to use by placing a finger on the home button after registering the owner's fingerprint and checking out at the register. There are no spending limits.

But in Korea, mobile payment is as usual more complicated. With LG Uplus' Paynow service, users have to go through a five-step process to buy a product at an off-line store. They need to install and run the app on their smartphone, enter a password, choose the type of settlement and show the cashier the bar code that appears on the smart device.

On the surface, Bank Wallet Kakao by Daum Kakao is as simple as Apple Pay. But the service is prepaid, which would seem to defeat the object, and users need to sign up via a personal computer in advance.

The reason is that it requires a security program like ActiveX, a buggy and antiquated Microsoft program that for some reason still holds sway here, to verify users' ID. And there is a W500,000 (US$1=W1,096) cap on transactions.

Excessive regulations are being blamed. The Financial Supervisory Service and Financial Services Commission are worried about security. One program developer said, "Even the most innovative ideas end up getting axed or modified beyond recognition after they go through the FSS's screening process. Financial authorities are virtually blocking fresh endeavors."

But an FSS official rejected the blame, "We are trying to minimize security risks in order to prevent illegal use, leakage of personal financial information and identity theft." The official admitted that the FSS checks a whopping 55 criteria.