President Chang Kyung-hoon of KEB Hana Card is joined by President Patrick Yoon of Visa Korea Inc. at his office in Seoul, holding the card announcing the start of the special payment service around the world on Aug. 14. (Photo: KEB Hana Card)

KEB Hana Card kicked off a special payment service thru a mobile app in 69 countries via a tie-up with Visa Card, the Korean company announced on Aug. 19. KEB Hana Card said it has become the first Korean card company to operate a mobile payment service based on temporary numbers in the tie-up with Visa.

The payment service is being accepted in Singapore and Australia at members firms in those countries that have NFC terminals to can handle the Hana One Q Pay Service.

Customers have to input their secret account numbers and tag the smartphones to the terminal to complete the payment services, Hana Card explained. Customers don’t always need their cards on their person as they can have the mobile cards issued from the App for immediate use.

In Korea, IC chips are generally used and many countries around the world have NFC terminals as the standard terminal for payment services with credit cards and thus are able to handle the simple payment service. Some of the 69 countries so far include Singapore, Britain, France, Australia, Russia, New Zealand, Hong Kong, and Taiwan.

Hong Kong, Vietnam and Singapore have seen simple payment service with NFC terminals on the rise, meaning that customers don’t have to exchange U.S. dollars with the local currency in those countries as they can use smartphones for payments. The smartphones, however, must have roaming activated and the pocket WiPi.

Transactions are subject to service fees amounting to 1 percent of the payment.

KEB Hana Card is scheduled to hold a coupon event in Singapore for customers using the app-based payment service until Sept. 15, with the top prize worth as much as 5 million won in various tour coupons.

President Chang Kyung-hoon said the company plans to expand the Hana One Q Pay coupon event, a global marketing service, to a number of countries including China, New Zealand, and Britain, among others.

At an internal forum at Hana Financial Group's headquarters in Seoul, KEB Hana Card's new chief executive Chang Kyung-hoon said the credit card company will need to stop being a card firm. It will have to be reborn as a totally different company, he said.

Specifically, it needs to become a digital information or data analysis firm with key future operations focused in Southeast Asia’s emerging markets, Chang said at the meeting during his inauguration in March.

The path won’t be easy, and it will be challenging for a minor player such as KEB Hana Card, the country’s No. 7 credit card company by profit, industry sources say.

But it is also the inevitable path in the face of card transaction fee rate cuts enforced by the state regulator and stiff competition in low-cost mobile settlements.

“It has become a matter of survival for any financial company facing restrictions at home that seek to boost their nonbank business portfolios.” said an industry source.

“As the new Hana Card chief executive mentioned, the company and any other ones eyeing overseas and digital are going to use whatever resources they have to achieve their goals.”

This would especially be true for Hana Financial, whose big portion of profit comes from KEB Hana Bank, as the holding group, too, wants to build its nonbanking capacity like other groups, another industry source said. “Besides Hana Card, Hana Financial Investment will need to play the leading role in the group’s endeavors.”

For instance, they can piggyback on the networks of PT Bank KEB Hana Indonesia and Line Financial to build their portfolios overseas. Line Financial, the fintech unit of Line mobile messenger, acquired a 20 percent stake in KEB Hana Indonesia for strategic ties in digital banking last year.

Line is one of the biggest messenger services in Indonesia, and KEB Hana Bank has the biggest operation there among local lenders that entered the region. Chang said the road ahead to find and explore “new territories” and develop its digital capacity will be hard.

The company will not only use its strength, but also the company and the group’s resources and networks to be reborn as a global data company, he said.

Chang added that Hana Bank will further collaborate with its key shareholder, SK Telecom, the biggest mobile operator, to achieve that goal. Hana Financial has an 85 percent stake in KEB Hana Card, while the rest is owned by SK Telecom.
“As part of Hana Financial Group, we have been providing overseas settlement services for more than 40 years.

We can further gain strength through the group’s domestic and global networks, and strategic ties with SK Telecom.” Chang told his employees. It will also pursue the acquisition of Lotte Card, the No. 5 card that can help boost Hana’s customer data.