South Korea Payments Market Size

South Korea Payments Market Analysis

The South Korean payments market is expected to witness a CAGR of 8.14% over the forecast period (2022 - 2027). The payment services worldwide are rapidly moving towards adopting mobile payment applications, such as Samsung Pay, Mastercard, Apple Pay, and American Express, to accept and transfer payments, and South Korea is no way behind. With increasing internet penetration and rapid growth in online retailing, this trend is expected to continue over the forecast period.

• According to Statistics Korea, In the year 2021, online shoppers in South Korea spent KRW 25 on food and beverages, whereas the spending on home electric appliances, electronics and telecommunication equipment was KRW 22 trillion, followed by the amount spend on clothing is KRW 16 trillion. Further, according to ministry of science and ICT (South Korea) poll done in South Korea in 2021, almost 74.5% of the participants said they have used their credit card to make an internet purchase. The same survey found that customers spent roughly 170,000 South Korean won each month on online purchasing. Such expenditure on online purchases will create a opportunity for the studied market to grow.
• In South Korea, more people are going cashless for both online and offline payments. According to the bank of Korea, only about 20 % of all payments in the country are made with cash which is among the world's lowest to leverage this growing opportunity, tech firms, credit card companies, and the government launched varied mobile payment services. As a result, the Electronic payments in South Korea increased 32.7 percent on-year in 2020, hitting a record high of KRW 705.5 billion (USD 624 million), in terms of average daily transactions, amid the COVID-19 pandemic.
• According to Korea Tourism Organization, In 2021, South Korea received approximately 967 thousand inbound visitors. Visitor arrivals in South Korea have shown an overall growth since year 2000. Such huge inbound of the tourist tourists in the region will drive the payment market, due to the spending on local goods purchase in local market by visitors either by cash or e-payment.
• Moreover, the Covid-19 pandemic has reinforced major shifts in payment behavior by declining the usage of cash payments, switching from in-store to online payment methods, and adopting instant payments. These transitions have created new opportunities for payment players in South Korea.
• The increase in international trade, internationalization of production, and cross-border e-commerce suggest that demand for digital cross-border payments will continue to grow globally. However, digital payments from one country to another might prove to be costlier, slower, and less transparent than domestic payments due to the complexity involved in the procedure. This might hinder the growth in the adoption of digital payments for cross-border transactions amongst the enterprises in the region, especially small and medium-sized businesses.