The consumer experience

Although SK planet launched the Smart Wallet as early as June 2010, it didn’t promote the service initially as there were only a small number of service providers supporting the wallet. SK planet also wanted to test and refine the user interface before large numbers of consumers registered to use the service.

Today, the Smart Wallet is preloaded on 50% of the handsets SK Telecom sells. To register for the service, the consumer inputs their individual security number issued by the government, which is encrypted on both the client and the server to keep this data confidential. Although SKT doesn’t use the SIM card to secure the service, the consumer can choose to protect access to the wallet with a PIN code.

SK planet says the Korean regulator audits the Smart Wallet system once every year to ensure that individuals’ government-issued ID numbers aren’t made public. Moreover, each new payment method that is added to the wallet has to pass a government audit first.

The Korea Times reported in May 2013 that a survey conducted by research firm Tillion found that 65 percent of Korean smartphone users aged over 14 had used smart wallet functions in the past three months. Of those who used smart wallet functions, 75 percent said SK planet’s Smart Wallet was the application they had used most frequently in the past month.

KEY STATISTICS

Operator: SK Telecom

Country: South Korea

Launch date: June 2010 (soft launch)

Services offered: Transport tickets, entrance/movie tickets, loyalty programmes, coupons and stored value cards, but not full payments yet. The wallet can be used both online and at point of sale.

Target audience demographics: All population segments

TSM provider: SK planet

Operating system: The Smart Wallet is available for Android and iOS.

Handset compatibility: The Smart Wallet can be used on all Android phones, iPhones, iPads and Android tablets sold in the Korean market.

Executive summary

SK planet, SK Telecom’s internet services arm, launched its Smart Wallet in June 2010 to help it build an e-commerce platform and attract consumers and service providers to the SK planet ecosystem. One of SK planet’s stated ambitions is to be Asia’s leading e-commerce player.

By April 2013, the Smart Wallet had nine million subscribers and 2.5 million active users per month. The wallet has been most successful with people in their twenties. SK planet says that 220 service providers support the wallet and it can be used in 80,000 locations across Korea. SK planet attributes the success of the wallet to its belief in the concept and the timing of the launch – it was the first service of its kind in Korea. SK planet also tries to support its service providers as much as it can. “If they want us to change, we change,” says Jeenwoo Park, manager at SK planet. “We have adapted to the changing market. We have changed the user interface completely, for example.”

SK planet earns revenue when a service provider issues a membership (loyalty) card for use inside the wallet. The service provider pays about 50 US cents to register a card and then 10 cents each time the card is used.

CASE STUDY: SKT SMART MOBILE WALLET

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September 2013

CASE STUDY: SKT SMART MOBILE WALLET

Features and functionality

The Smart Wallet, which can be used both online and at point of sale, supports transport tickets, entrance tickets, movie tickets, loyalty programmes, coupons and stored value cards, but not payments from debits and credit cards. A consumer can retrieve MasterCard and VISA cards installed on the SIM card, but they can’t be used via the wallet yet. However, the Smart Wallet’s stored value card can be used at the country’s five main convenience stores, a bookstore chain and movie theatre.

To redeem coupons stored in the Smart Wallet and collect loyalty points, consumers use barcodes and QR codes with an expiry date. SK planet says that many Korean merchants don’t yet have the necessary contactless infrastructure to support NFC, but the wallet will support NFC transactions in future.

Compatible with any smartphone or tablet running Android or Apple’s iOS system, the Smart Wallet service is independent of the SKT network and the SIM card, so customers of other Korean mobile operators can download the wallet on to their phones.

If a consumer switches mobile operator they can take the wallet and its contents with them. The Smart Wallet is designed for use in South Korea, but if the consumer has registered with one of the airline programmes supported by the wallet, they can collect points and mileage on purchases made in some foreign airports.

Wide support from service providers

At first, Korean merchants didn’t have any interest in the Smart Wallet proposition, says Jeenwoo Park, manager at SK planet, as they didn’t see any need for a wallet service. However, Park says consumers began to adopt the service because they wanted to be able to keep multiple membership (loyalty) cards in one place.

As more consumers adopted the wallet, SK planet convinced more service providers to come on board. SK planet says that 220 service providers now support the wallet and it can be used at 80,000 point of sale locations across Korea. SK planet promotes the wallet to service providers on the basis that it will enable them to reach the operator’s large customer base and can be used to support customer relationship management (CRM). The service provider pays SK planet about 50 US cents to register a loyalty card and then 10 cents when the card is used.

Jeenwoo Park says that SK planet is very responsive to requests from service providers. “We provided a very simple standard page for coupon or membership, but service providers requested that we produce a more sophisticated design with more images, more information categories or new functions,” he says. “In this case, we modified their pages as they required and updated the page features as our standard. For instance, we implemented a membership page as an HTML page, accessible from the web server and made it modifiable in a timely manner so that users didn’t need to upgrade their app each time a service provider modified their page. After this, we applied a service provider’s requirements to our standard page enabling all other service providers’ pages to be updated.”

SK planet says it plans to further develop the Smart Wallet into SK planet’s flagship payment platform.