Good news to everyone! You can buy Google and Apple mobile apps with Korean currency this year at the earliest. Until now, we had to buy mobile apps in dollars and had to bear foreign authorization fee and exchange fee. But recently the FSC has revised the relevant law to make it possible to pay with Korean currency using credit card. Then, let’s look into the Korean mobile application market.
-Rapidly Growing Korean Mobile Application Market
The number of smartphone users in Korea surpassed 30 million last year. Korea’s smartphone penetration rate is almost unparalleled in the world. Not only this rapidly growing number of smartphone users but also numerous creative applications made Korean mobile application market grow bigger and bigger. Presently volume of the Korean mobile application market has reached about 1.3 billion US dollar.
-Present mobile app payment system and Electronic Financial Transaction Act in Korea
While mobile app market rapidly grows, app users’ inconvenience in Korea is also substantial. It is because they cannot buy applications in App store or Google Play Store with Korean currency. Paying with domestic only credit card is also not allowed.
The primary reason for this inconvenience lies in the present law. According to the current law, Payment Gateway (PG) is not authorized to foreign business for using Korean won as a payment method. For reference, Payment Gateway service is an e-commerce application service provider that authorizes payments for e-businesses, online retailers, bricks and clicks, or traditional offline transactions.
Under the existing Electronic Financial Transaction Act, one should register oneself as a PG provider to the FSC and most importantly the subject is limited to only Korean company. In addition, server computer used in processing payment should be located in Korea.
-FSC’s new decision
Last month, the FSC has decided to revise the existing Electronic Financial Transaction Act, in order to permit foreign business to register as a PG service provider in Korea. This decision will lead to vitalization of Korean won payment in mobile application market. Concretely, the FSC will allow financial companies to consign or locate information-processing facilities overseas. Meanwhile other countries have more flexible regulations on this issue. For instance, the USA and Japan allow mobile application transactions with local currency. Some countries such as the UK and Australia also have permit system.
-Expected Positive Effects
Until now the FSC has maintained a strong commitment toward this issue because of a necessity to more efficiently respond to information leak and related accidents. Also, there was a prime authority issue over financial supervision. Nevertheless, for the sake of consumer’s convenience, the FSC has changed its attitude.
So if Apple and Google get authorization as a PG service provider, we can pay with Korean money when purchasing apps. In addition, getting a refund would be much easier. Currently, if we want refund from Google Play Store, we should cancel the purchase within 15 minutes. Most of all, charges would be reduced. In overall, it is expected to bring a greater convenience to Korean mobile application users.
By Bora Oh (email@example.com)