LG Pay, LG Electronics’ mobile payment service, is planned for release in September in the form of an 'All-in-One Card' and the first to feature an Integrated Circuit (IC) chip. LG Pay is expected to challenge the other emerging e-payment methods -- Samsung Pay, and Apple Pay.
Samsung Pay uses Magnetic Secure Transmission (MST), which transmits a magnetic signal that imitates the magnetic strip on a traditional card. Samsung Pay's ability to use both MST and the similar Near Field Communication (NFC) technologies.
Apple Pay is based on NFC with 'IC transaction linkage'.
MST transactions are expected to stop starting from 2018, gving an advantage of LG Pay against Samsung Pay.
LG Electronics has already signed up a MOU with KB Bank in order to support LG Pay. In addition, LG's IC Chip transactions are expected to become the main platform of financial companies.
Through cooperation with KB Bank, LG Pay will be connected to existing financial products. The LG Pay White Card has a range of uses, including withdrawing cash from an ATM. It can also be used as an ordinary credit card. On the innovative side of things, it sports an LCD display that allows users to select which credit card they want to use. Purchases of goods will be possible at stores that support cash cards. LG Pay will support all the infrastructures of instant-paying cards that are currently competing against check cards.
Along with cooperation with KB Bank, LG Electronics has already started working on linking LG Pay with Shinhan Card and KB Card. According to unconfirmed information, LG recently made partnership with major card companies such as Lotte Card, Hana Card, BC Card, NH Card and others.
LG Pay's card will implement the Smart OTP (One-Time Password) function. One-time passwords are generated for personal authentication in order to facilitate transactions. Until now, bank customers had to prepare OTP modules separately and possess them. LG Pay eliminates this inconvenience by storing Smart OTP and it will even replace OTP Cards.
LG Pay can block any illegal uses from the start and is one step towards implementing the EMV standard. EMV (Europay, MasterCard and Visa) is a technical standard for smart payment cards and for payment terminals and automated teller machines that can accept them. EMV cards are smart cards (also called chip cards or IC cards) which store their data on integrated circuits rather than magnetic stripes, although many EMV cards also have stripes for backward compatibility.
LG's "White Cards" have been already ordered and will be produced by a Smart Card manufacturer by September.
Although this mobile payment solution will only launch in Korea at first, an international rollout is planned. One thing that could hold back the growth of LG in the mobile payment sector is how they are rather late to the game. Apple Pay, Samsung Pay and and Android Pay have both launched earlier and are gaining more adoption around the world.