A mobile payment project by South Korean mobile operators SK Telecom, Korea Telecom Freetel and at least one other operator, will use the infrared spectrum to transmit data between wireless devices and point of sale terminals. The plan is to install miniature smart cards in their handsets that store standardized credit applications.
While serious interoperability problems loom with the terminals, the nation promises to be the first to adopt the technology for mobile payment, reports Card Technology. SKT, the country's No. 1 mobile network operator, says it plans to spend $500 million by the end of the year to equip POS terminals, Kim Sung-ho, manager of the m-Finance planning team at SKT, tells Card Technology.
User handsets will also have to have infrared ports. The Korean operators will utilise CDMA wireless network technology, which does not require subscriber identity module cards in handsets to authenticate subscribers to the networks. Thus, the operators will install SIM-sized cards in a special slot in the handset's battery pack instead.
Besides International EMV applications, the cards will store the telcos' membership loyalty applications. SKT says it is considering other applications, such as ID card features. And, it confirmed plans to add a second, contactless, chip to the handsets to allow users to pay their transit fares via radio frequency. "We're trying to reach a world where people don't need to bring their wallet," says Yoon Tae of the SKT's m-Finance planning unit. At least one of the country's forthcoming third generation, high-speed, networks, run by KT ICOM, sister company of KTF, also plans to use infrared for mobile payment.
In this case, the EMV credit or debit application will be loaded onto a UICC, or USIM, card that will run in handsets to control access to the telco's 3G network, scheduled for launch in the middle of next year. All the telcos considered Bluetooth wireless technology to transmit the payment data, but considered it too immature and expensive. They are negotiating with banks and credit card companies on conditions for putting the payment application on the telco-issued cards, but KTF has already signed up LG (credit) Card. The banks will have control over their applications and data, they say. "At first, they (banks) were bothered because banking companies always have (had) their own chips," says Park Shin-young, deputy manager of KT Icom's M-Commerce Team. Security for infrared isn't an issue, according to the telcos and Visa Korea, which is involved in the STK project
