Mobile payment service Hankook NFC has secured 3 billion won (USD $2.7m) in investment from Japanese accounting software developer MJS (Miroku Jyoho Service). The two companies made the deal on May 16 and also signed a service partnership agreement.
It’s the fourth funding round for the Korean startup, having received venture capital from KDB Capital and L&S Venture Capital last year, putting the company’s total received investment at 5.5 billion won. It’s also the first overseas funding for Hankook NFC, which received support form incubator Born2Global.
Hankook NFC’s flagship app is Phone 2 Phone, which lets anyone with an NFC-equipped smartphone take payments from credit and debit cards, as well Samsung Pay. The service is largely targeted at merchants who aren’t able to use card terminals due to cost or bad credit ratings. Many food delivery businesses in Korea have allowed card payments for some time, but often use a separate mobile terminal or accessory. Phone 2 Phone takes away the need for any separate device, and receipts can be automatically sent via text or email.
MJS will use NFC Hankook’s patented technology and oversee the launch and marketing of Phone 2 Phone in Japan. The firm is a leading accounting and information management service developer in the country and has also established a fintech-focused subsidiary named MJS Finance & Technology.
Consumers rarely use credit cards to pay in Japan, and make up a mere 17% of all transactions. With card companies requiring high fees, the number of merchants that accept credit cards is relatively low. The issue has been pointed out as a potential problem for visitors when the Summer Olympics are held in Tokyo in 2020, and the government and card companies are now working to expand infrastructure. NFC Hankook hopes to play a part in increasing credit card spending.
“While Apple pay is very popular in Japan, one disadvantage is that NFC readers are only available in the subway and at certain convenience stores,” says Richard Hwang, CEO of Hankook NFC. “If merchants install Phone 2 Phone on their device, they are able to take electronic payments including Apple Pay and Credit Cards without upgrading their POS equipment, bringing innovation to Japan’s transaction market.”
Going forward, the company plans to add Apple Pay to its Phone 2 Phone platform by the end of this year.
In addition to Phone 2 Phone, NFC Hankook offers quick online payments through NFC Pay, which works by tapping your card to your phone. It’s part of a slew of new, easier payment methods, in stark contrast to the well-known myriad of Active X plugins and “security“ programs which banks continue to use. The company is also taking on real name verification, its NFC Authentication program making the process smoother by confirming your identity through your credit card.