SK Telecom said Thursday that it will set up a joint venture with Citigroup to sell mobile banking (m-banking) and payment solutions in North America and Asia.
The two firms will invest $8 million each to launch Mobile Money Venture, which will be based in San Francisco. The joint venture plans to provide various mobile money transaction services, such as SK Telecom's Moneta service in Korea, from the second half of this year in major American cities and Hong Kong.
"We are exploring a new mobile era with Citi, a global financial services provider,'' said So Jin-woo, president of Global Biz Company, SK Telecom. "With our expertise in telecom and mobile finance, SK Telecom is proud to provide our advanced technology to customers worldwide and deliver the next-generation mobile banking technology.''
SK Telecom will be developing the mobile banking software and hardware systems for Citibank customers in Hong Kong and major cities in the United States first. "This is not an exclusive deal, so we will be able to sell the platform to other banks and mobile carriers in other countries later on,'' said SK Telecom spokeswoman Cindy Kang.
After testing the mobile banking system, the firm will then move onto mobile payment and electronic coupon services, Kang said. The joint venture will be run by Steven Kietz, who oversaw e-commerce and direct banking initiatives at Citi.Mobile commerce is gaining popularity all over the world, especially in the Asian region. Most services enables customers to check their balance, pay taxes and utility bills and transfer money by accessing the banks' online service.
More complicated ones such as SK Telecom's Moneta provides a system where people can pay at shops, restaurants, on buses and subways by swiping their mobile phone. Often called the "electronic wallet,'' such a phone payment system uses a chip, which is inserted in the handset and electronic readers.
Three Korean mobile firms ― SK Telecom, KTF and LG Telecom ― and a number of commercial banks have been actively developing the mobile commerce services, hoping phones will someday replace wallets and ATM machines. But competition between mobile operators and banks for the initiative of the business has caused delays in the deployment of the services, said SK Telecom's Kang, adding that the SK Telecom-Citi venture will not have such problems.