The move is widely seen as Google increasing its efforts to boost its presence in the domestic mobile transactions market. The Korean government has increased its efforts to promote the financial technology, or fintech, industry largely between banks and information-technology companies. Fintech investments reached $12 billion in 2012, tripling from $4 billion a year earlier, according to global consulting firm Accenture.
Once fintech services are up and running in Korea, customers will be able to transfer money to their families overseas by using popular mobile messaging applications such as Kakao Talk and LINE, the FSS said. “Koreans had to use credit cards affiliated with Visa or Master Card to make a payment for purchases at overseas online shopping malls on their mobile devices,” said Kim.
“We applied to register as a foreign-exchange business operator with the finance ministry to help Koreans who carry credit cards nonaffiliated with Visa or Master Card purchase Google apps on their mobile gadgets.” She didn’t elaborate further on Google’s plan to expand into the local online transactions market. The finance ministry official said Koreans who buy apps through Google Play Store used to pay dollars through banks to apps providers. “But the registration as foreign-exchange operator will have Koreans make an electronic transfer, mostly small amounts, directly to the apps providers possibly as early as next year. Google has to provide further documents to get approval,” he said.
In Korea, Google is the first PG to ask for registration from the government to have foreign-exchange operations. Several others are home-grown PGs, according to the ministry.
Korean officials said Google’s expansion in mobile transaction services won’t deal a blow to banks because mobile payments and settlements account for a small portion of their Business.
