Samsung Pay may not remain free for credit card providers

Samsung has notified all Korean credit card companies that it will no longer extend its free Samsung Pay service agreements with them. Similar to the recently entered Apple Pay, Samsung Pay will charge fees to credit card companies to continue usage.

According to the report, Samsung sent a letter to all Korean card companies, citing that the Samsung Pay service contract will not extend after August 10. This is the first termination notice that the company sent to providers in eight years since its debut in 2015.

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It came as a disaster for credit card providers as they have seriously promoted the use of Samsung Pay in the country in the hope that it will remain free always. Estimation suggests that Samsung Pay has 16 million users and the company wants to negotiate with card issuers.

However, it remains unclear whether Samsung will go for charging credit card issuers for Samsung Pay or not. This is because what Samsung Electronics has notified the credit card companies of so far is not that the OEM will charge fees for Samsung Pay unless the contracts are extended.

“There is no decision on charging fees for Samsung Pay yet,” a Samsung Electronics representative said.

If Samsung Electronics decides to charge for Samsung Pay, it seems inevitable that benefits for cardholders will be reduced. If Samsung Pay fees are added as new expenses, it will cut into credit card companies’ profits.

Government authorities said that while charging fees is a private and autonomous matter, it will intervene in the issue of credit card companies passing on related costs to consumers.

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