LG Officially Announces LG Pay Mobile Payments

November 23, 2015         By: Steven Anderson

It wasn’t so long ago when we were considering the idea of LG joining the mobile payment market, wondering how long before Huawei and other mobile device makers followed suit.

With a market built right in—mobile device users needing payments—it seemed a natural extension. LG has proven that point fully true—as well as the rumors surrounding the development—with the announcement of LG Pay.

LG Pay brings together not only LG, but also Shinhan Card and KB Kookmin Card, two major credit card issuers in South Korea, to bring out service in South Korea to begin with. That’s a fairly nice market, but word already suggests that future arrivals in other countries are on the table; this is just a start for LG.

LG pulled a similar move not so long ago when bringing out the Watch Urbane; it started in South Korea and started expanding from there, only recently hitting United States markets.

There’s no word as yet on what kind of functions LG Pay will have, or how it plans to distinguish itself from immediate rival Android Pay, let alone the other major carrier-branded mobile payments systems already in the field. Reports note that LG is likely to bring out further word over the next several weeks as the system gets closer to launch.

One thing is immediately clear: LG Pay is going to have to have a serious function set just to keep users out of the Android Pay garden. While it’s a safe bet that current Apple or Samsung users won’t throw over their brands of choice to get in on LG Pay—which would likely require an LG phone to use—it’s a real opportunity for LG to cement its current customer base.

The good part about mobile providers offering mobile payment services as well is that it’s a value-add, not only for the customers who get a new service, but also for the device makers, who get a new revenue stream, taking chunks of every transaction in processing fees.

This gives device makers an opportunity to reduce system costs, or just plow cash into development, creating even better devices in the future.

With LG joining the likes of Apple and Samsung, it’s easy to wonder if perhaps soon every mobile device will come with its own branded mobile payment system. It’s likewise easy to wonder just what the non-branded payment systems, like Square and PayPal, will do in response.

Will such processors be able to hold current numbers in the face of a market where every smartphone comes with its own mobile payment system? Or will this be the start of a lot of payment processor closures?