September 16, 2009
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News: Credit Card Companies In The Phone Business
Competition is becoming fierce between South Korean credit card companies, but the focus isn't on traditional lending strategies. The country's top lenders may soon be competing for a large share of the mobile phone business. A concept that is only being tested in a limited number of countries is being aggressively pursued by South Korea's Hana credit card company. Hana hopes to form a partnership with SK Telecom as soon as South Korea's broadcasting and telecommunications regulator, the Korea Communications Commission (KCC), is able to revise laws that make it difficult for a credit card company and wireless phone carrier to partner.
Since the news broke that Hana Financial Group was interested in joining SK Telecom in marketing a new mobile phone, other lenders have begun kicking around the same idea. The mobile phone in question is no ordinary cell phone; it comes with an embedded chip that allows the phone to function as a credit card. Word is that BC Card, another one of Korea's largest credit card companies, is also considering starting up their own wireless phone service as a mobile virtual network operator (MVNO). An MVNO company is one that does not have their own licensed frequencies or infrastructure to enable them to provide wireless service, therefore, they would need to purchase the minutes from a telecommunications network.
The country's largest credit card company, Shinhan Card, wants to get in on the mobile phone business as well. Rumor also has it that Shinhan has been gathering marketing ideas cooperatively with KT, South Koreas most prominent wireless provider in hopes of offering its own MVNO mobile service. South Korea's cable television networks are also flirting with the idea of entering the MVNO market. Their current ownership of radio frequency identification equipment (RFID) makes it a logical pursuit. Meanwhile, the KCC is hopeful that MVNO availability will create more competition and lower mobile phone pricing. For now, everything must remain in the planning stages while the KCC's bill remains in the National Assembly awaiting approval.