Visa Korea Nation Supervisor Patrick Storey speaks to The Korea Instances on the firm’s workplace in Seoul, Thursday. Courtesy of Visa Korea
When Patrick Storey moved to Korea in 2021 to work because the nation supervisor for Visa, he did not count on his first impediment to be at a subway station. He acquired up early to catch the practice to work and tried to faucet his contactless Visa card on the gate — similar to he did in Singapore, his earlier posting. However no, that did not work right here.
He then went on the lookout for a ticket machine. Once more, no luck — the machine did not settle for playing cards for cost. On a Monday morning, that meant wandering round searching for an ATM. Finally, he discovered one, withdrew some money, and returned to the ticket machine. However as soon as extra, no success — the machine rejected the invoice and spat it out.
“The transit system in Korea is improbable. The trains run on time. They’re clear, they’re environment friendly, however the cost could be a ache in the event you’re not Korean,” Storey advised The Korea Instances in a latest interview.
Korea has the tradition the world needs, however not the cost system.
Overseas nationals usually wrestle to take Korea’s public transportation, as a result of it doesn’t help what’s often known as an “open-loop cost system” — a system that permits riders to make use of on a regular basis contactless debit or bank cards or cell wallets, even when they are not issued in Korea.
The system was first launched in London in 2012 and has since been adopted in main cities corresponding to New York, Hong Kong and Singapore. In 2024 alone, Visa processed over 2 billion contactless transit fare funds — greater than double the amount recorded in 2022.
An indication studying “Solely Home Playing cards are Accepted” is displayed above KTX ticket kiosks at Seoul Station, March 26. Solely two machines settle for worldwide playing cards, one in all which is out of order. Korea Instances picture by Jung Da-hyun
Nevertheless, below the present setup in Korea, foreigners should buy a separate transportation card, corresponding to a T-money card, which may solely be topped up with Korean gained, or receive a home credit score/debit card that helps transit funds. Whereas some buses beforehand accepted money, many have gone cashless.
Korea’s transportation cost system, often known as payOn, has remained the dominant methodology since its launch in 1997, giving home stakeholders little incentive to deal with its limitations.
This led Korea to have one of many lowest charges of contactless cost adoption within the Asia-Pacific area. It is a shocking truth for a society as technologically superior and cashless as Korea, Storey famous.
And the problem extends past public transit. Many Korean web sites tailor their methods for home customers, usually requiring identification verification by way of a Korea-registered cell quantity — regardless that it is not legally required. World cost strategies like overseas-issued Visa or MasterCard are steadily not supported.
This restricted accessibility might partly clarify why inbound on-line spending lags far behind outbound. In keeping with the Financial institution of Korea, in 2024, Koreans spent 8.1 trillion gained ($5.5 billion) on international items on-line, whereas abroad customers spent only one.6 trillion gained on Korean merchandise — about one-fifth as a lot.
Storey believes that Korea is lacking a major alternative. If the nation’s cost methods grew to become extra inclusive, it might unlock far higher world demand.
Overseas vacationers take pictures in entrance of Gyeongbok Palace in Seoul, Nov. 19. Korea Instances picture by Shim Hyun-chul
Tangibly, it will help the tourism trade by encouraging extra guests to discover past Seoul. Intangibly, it might entice spending from folks all over the world who might by no means set foot in Korea however are deeply engaged with its tradition, from Ok-pop and Ok-dramas to style and sweetness.
“If we make funds extra handy for folks on daily basis, and simpler for retailers to receives a commission, you increase the market from the 50 million plus folks residing on the peninsula to doubtlessly 9 billion folks across the globe,” he mentioned. “They’ve settled into a really environment friendly home market, they usually do not realize that these are alternatives they’re lacking.”
That is why he spent the previous 4 years working with stakeholders in Korea — not simply to construct infrastructure, however to shift public notion.
A key milestone got here this 12 months, when Visa launched an open-loop cost system for Jeju’s transportation community, following a March settlement with the island’s self-governing province. Since Aug. 15, international guests have been in a position to trip while not having a separate ticket or transit card.
Storey mentioned he works on daily basis with shoppers to outline Visa’s function, particularly because the funds panorama quickly evolves with the rise of massive tech, simple cost suppliers and even stablecoin gamers.
“It is a query we attempt to reply with our shoppers each single day: Is there friction in commerce? How can we make the cost expertise higher — for each patrons and sellers?” he mentioned. “In that sense, I see large alternative right here, significantly in cross-border commerce and amongst small to medium-sized enterprises.”
