"Now the cellular phone embraces the credit card" On April 11th 2002, SK Telecom announced the launch of the ?Cellular Phone One-Chip Service? that allows on/off line payments by installing a smart card in the cellular handset. The smart card contains a variety of financial information, as well as individual customer information.

The Cellular Phone One-Chip Service allows users to conveniently purchase goods through the infrared port installed in their cellular handset instead of using a general plastic credit card. This infrared port transmits transaction status to the reader system in an one-touch manner. This service does not require users to input the number of their credit card, e-Money, or OK Cashbag when they make payments through a cellular phone that contains the smart card with an Integrated Circuit chip.

In particular, SK Telecom?s Cellular Phone One-Chip Service is the world?s first cellular payment service based on smart card?s IrFM (Footnote 1) technology standardized by IrDA (Footnote 2) International Organization. This IrFM technology is based on EMV (Footnote 3). The service features more security and expandability than the existing technological method that processes magnetic credit card information by saving this in the cellular handsets.

SK Telecom plans to export this payment solution after refining the service during this year. Moreover, the companies related to the service will move ahead with a plan to export products like the One-Chip terminal. The Cellular Phone One Chip Service allows users to make payments with accumulated bonus points on credit card, e-Money, or OK Cashbag in on/off-line affiliated stores. SK Telecom also offers membership services (TTL, UTO, and Leaders Club) through this service.

The world?s financial industry is trying to substitute smart cards based on EMV for existing magnetic credit cards. In order to keep up with this trend, SK Telecom has actively implemented standardization activities in cooperation with the IrDA International Organization and financial institutions. As a result, the company was able to launch the One-Chip service based on an infrared payment system. With this service, customers can enjoy secure and convenient payment service in mobile, on-line, and off-line environments. Customers do not have to carry various credit cards in their wallets, and only need a single cellular handset to execute mobile transactions.

This trial service will be carried out for special monitoring groups, inside and outside SK Telecom, by using SK Teletech?s SKY IM-3400 handsets (Smart card can be loaded with the battery) and KMPS?s Domestic major value- added network company) credit card reader. The commercial service will begin by the second part of this year when smart card-loaded terminals are launched.

In order to stabilize the service in its early stage, SK Telecom will focus on expanding ?One-Chip Zones? such as department stores, discount stores, gas stations, restaurants, etc. To this end, the company plans to supply 30 thousand card readers to affiliated stores in the beginning, by utilizing a 10 million US dollar fund with Visa Credit Card and KMPS. After launching the commercial service, SK Telecom will increase the distribution of card
readers.

SK Telecom launched the ?Moneta Card? based on smart card technology in October of last year and Moneta Card-inserted type ?Moneta Phone? service in February of this year. The company introduced a ?Credit Card Payment Service with Cellular Phone based on One-Chip?, and SK Telecom will continue to launch new services that combine telecommunication and finance.

Footnote 1: IrFM (Infrared Financial Messaging) is a communication standard defined to send and receive financial information through infrared communication.

Footnote 2: IrDA (Infrared Data Association) is a transmission standard for local wireless data (Sub-level of IrFM)

Footnote 3: EMV (Europay Master Visa) is a standard smart card type credit card that was established by Europay, Master, and Visa.