Don’t Bother Visiting the Bank

What should we do if there aren’t any banks or personal computers near when we have to transfer money in an urgent situation?

The problems will be solved when we simply press the buttons of the cellular phone in our pocket.

“Mobile Banking” is the service that allows people to enjoy banking services such as account reference, remittance, and defrayment of money simply with a cellular phone equipped with an exclusive chip anywhere and anytime. Credit card, check card, and transportation card functions are also equipped on this chip.

If a customer simply places his or her cellular phone in front of an Automated Teller Machine, it offers customers the same banking services as a check card. With a simple push of buttons, remittance and defrayment of money can be ordered.

According to the “Conditions of Internet Banking Service Use in Korea,” issued by Korea Bank nowadays, the number of cases of mobile banking services being used by domestic banks and postal service has reached the 3,329,000 level, showing a 30 percent increase from that of December when the mark was 2.56 million.

According to this, the competition between three mobile service providers such as SK Telecom, KT Freetel, and LG Telecom over the mobile banking market has been heated.

The companies expect that approximately three million people will utilize the mobile banking service by 2005.

In order to use mobile banking services, an exclusive cellular phone that can accommodate a Smart Chip is needed. These exclusive cellular phones, that vary in price from 200,000 won to 400,000 won, are being supplied by the mobile service providers and banks at a lower price level than their marked price.

But mobile banking services cannot be directly accessed by a mobile phone because each bank has its own contracted mobile service provider.

SK Telecom (011, 017) made a contract with Woori, Hana, Choheung, and Shinhan Bank, KT Freetel (016) with Kookmin, Hanmi, and Busan Bank, and LG Telecom with Kookmin, Jeil, Korea Exchange, and Kiup Bank.

In case one’s mobile service provider does not have any affiliation with a certain bank, the banking service cannot be accessed.

Once the bank and mobile service provider affiliation is checked, a customer should hand in a chip issuance application to the bank that enables internet and mobile banking services. Inserting the chip connection password and installing the chip into the cellular phone enables one to use the service.

The service use fee can be divided into two categories, the data use fee, and banking service charges, such as the remittance charge, which is similar to the level of internet banking, around 500 won per case. Each mobile service provider has its own free-of-charge period. The data use fee is a fixed price, 800 won per month.

Jae-Yun Jung jaeyuna@donga.com