Payments around the World - South Korea

​South Korea might be more famous for its movies, k-drama celebrities, stadium-filling boy / girl bands, but it has a pretty active market for payment services as well. Due to strong technological and mobile adoption, South Korea is one of the biggest e-commerce markets worldwide.

South Koreans enjoy buying on their phones. Mobile purchases account for 60% of all transactions, requiring providers to enhance their mobile platforms. One-stop shops are drawing an increasing number of customers. In order to meet customer expectations, businesses that operate several online stores often attempt to combine them into one huge online store.

Trends & Payment Market Overview

Cards remain a popular method of payment for South Korean online shoppers. Alternative and regional payment methods, however, also hold a sizable market share. Credit cards are used for 72% of internet purchases in the country. However, 28% of all cards in use were issued by non-standard providers, as seen from a Western perspective.

Mastercard holds a 28% market share, American Express merely 4%, and Visa 40% of the total card market. The remaining portion of the South Korean payment market is divided between cash (2%), a variety of small payment providers (4%), bank transfers (17%), and e-wallets (5%).

In addition to Visa and MasterCard, BC Card, Lotte Card, and T-Money are a few more card brands that are active in Korea.

With e-wallet, customers buy products or services online utilizing one of the most widely used payment options in the nation, such as KakaoPay or Toss. A user's e-money account can be topped off with funds from a variety of sources, including a credit card and an online bank transfer. E-money can be accessed and saved online or on a mobile device.

Crypto Payment Acceptance

With a population of only 51 million, South Koreans account for 30% of the world's cryptocurrency transactions​, and young people are the main force. According to statistics from South Korea's FSC, there are more than three million young people under the age of 40 who trade digital coins in the country. In other words, one out of every five South Korean young people is investing in cryptocurrencies.

The country is one of the world's tech hubs and is big on cryptocurrency despite the LUNA/Terra catastrophe. More than 7,000 people registered to attend Korea Blockchain Week in August, and there were more than 120 speakers scheduled.

In contrast to public enthusiasm, the Korean government has been closely watching the cryptocurrency market. In July, regulators looked into $3.1 billion "abnormal" foreign exchange transactions at two of the major commercial banks for potential money laundering related to cryptocurrency investments. 16 persons were detained in August on suspicion of engaging in unlawful cryptocurrency trading.

As a result, crypto as a payment, is not accepted in a matching fashion as how popular it is among people as an investment. A 2021 survey conducted in Seoul shows that there were around seven offline stores in Seoul, South Korea that accepted Bitcoin as a payment method. The other 43 stores surveyed either accepted Bitcoin in the past but stopped doing so, or had closed their business.

Future Outlook

Many global and local payments players are growing their business in the South Korean Payment market because of the increasing online payment demands from e-commerce websites, which link these players to the global marketplace. For instance, In July 2022, financial technology leader FIS announced that its merchant solutions are available in South Korea​, a part of its continuing efforts to broaden its global merchant services footprint.

From 2022 to 2027, the South Korean payments industry is anticipated to grow at a CAGR of 8.14%. South Korea is not far behind the rest of the globe in implementing mobile payment systems like Samsung Pay, Mastercard, Apple Pay, and American Express for accepting and transferring payments. This trend is anticipated to persist during the projection period due to rising internet usage and the rapid expansion of online retailing.