"This mobile payment technology that was uniquely developed by SK Telecom (www.sktelecom.com), has been selected as Visa’s international standard technology" On the 20th of May, 2002, the representatives of the two companies (Man Won Jung, head of SK Telecom?s Internet Business Division, Mark Burbidge, vice-president of Visa, and Young Jong Kim, president of Visa Korea) got together at the SK Building in Seorin-dong, and finalized the MOU.
This MOU agreed that both companies participated in the further development of SK Telecom?s mobile payment technology and to supply it to the world market. The MOU also agreed that Visa would adopt this technology as the international standard for Visa?s worldwide operation.

In this regard, the two companies will first install smart card type credit card in the cellular phone and further develop mobile payment technology that allows the payment through infrared communication system in accordance with ?Infrared Financial Payment? (footnote 1) standard. The companies will also adopt this payment system as the international standard of EMV (footnote 2)-based local mobile communication payment system and supply them to worldwide mobile communication operators as well as financing firms

This technology allows Visa cardholders and cellular subscribers to enjoy a new way of financial transactions that they can purchase the merchandise at affiliated stores, gas stations, book stores, restaurants, and many other places at home and overseas, then pay the bill through the cellular phone.

One significant importance of this MOU is that Visa, the world’s best credit card company, approved SK Telecom’s m-Commerce technology and its business strategies for its use. This allowed the two companies to create a synergistic effect, and expand the m-Commerce market.

Through this MOU, SK Telecom also gained a great deal of ground in promoting its own mobile payment technology as a national and international standard, through cooperation with the world’s most prominent financing corporation. The Visa also made an epochal turn from the existing credit card based on a Magnetic Strip, to the EMV which is based on Smart Card infrastructure that gives far greater security and extensions of uses.

This technological affiliation by two companies which are world leaders in their own industry, will have explosive effects on the market, as well as promoting the commercial transaction method of the future that is converting from the typical credit card based on magnetic strips run through a reader, to a new form of credit card used through a cellular phone.

If this technology is selected as the international standard, it will create the enormous solution sales revenue for SK Telecom, and allow other related companies, like cellular phone and reader device manufacturers, to export their own products all over the world.

The SK Telecom’s mobile payment technology is a uniquely self-developed technology that establishes EMV as the smart card standard in a cellular phone based on IrFM, for the first time in the world. This technology has a clear distinction from other companies’ IrFM-based payment system, because it complies with the EMV standard based on international standard?s SIM(Subscriber Identification Module, Note 3) card size semiconductor chip.

In other words, it is far superior in its security, convenience, safety, and compatibility, compared to other companies’ technology which simply applies the existing approved methods in their production, issuance and usage of credit cards.

SK Telecom has been providing ?Moneta Shot?n Pay(tentative name)?, the cellular one-chip payment service, since April 8th as a model service at the 20 member stores located inside SK Telecom’s main office building and Seoul Financing Center on Taepeung Road. The company keeps striving to develop and distribute the cellular handsets for the exclusive use of this service, and expand the number of member stores using this service. SK Telecom plans to have this service commercialized by the end of this year. In addition, to ensure the customer can easily and conveniently make transactions through the cellular phone, the company will supply more than 30,000 reader devices to strategic member stores that are popular, and carry items that fit the lifestyle of service users. A 10 million dollar fund was set up in March for this purpose that was funded by SK Telecom and other related companies.

The company also started a full-scale conversion from magnetic cards to smart cards throughout the Asia-Pacific Region under a chip conversion program sponsored by Visa, the world’s largest credit card company. The Visa’s plan is to convert over 90% of the existing magnetic cards in the Asia-Pacific Region, to EMV standard chip cards by the year 2008. This conversion should be completed in Korea by 2006.


Footnote 1) IrFM (Infrared Financial Messaging)
- The communication standard that is designed to make
financial transactions through infrared communication.

Footnote 2) EMV (Europay-Master-Visa)
- EMV is the credit card and financing transaction system
standard that was decided upon by the three world’s
largest credit card companies (Visa, Master Card and
Europay).

Footnote 3) SIM(Subscriber Identification Module) Card
- This card is the device that records and writes the
subscribers information like the telephone number
with the memory card that is installed in the GSM
cellular phone.