KT Corp, South Korea's No.2 mobile carrier, said on Thursday that it plans to become the top shareholder of credit card processing firm BC Card, betting on mobile payment services to generate new revenue.
KT (Seoul) said in a statement that its board had approved its planned purchase of a combined 33.85 percent stake in BC Card from Woori Bank and Shinhan Card.
Like overseas telecommunications companies, KT Corp and larger rival SK Telecom Co Ltd (Seoul) are vying to tap the emerging market for mobile payments, which some say could eventually replace credit and debit cards as the primary means of payment.
The system allows consumers to use mobile devices such as mobile phones to pay for items though the use of short-range wireless technology known as near-field communication (NFC).
While such services are popular in places such as Japan, they have been slow to take off in South Korea, despite the high level of mobile penetration.
KT Senior Vice-President Han Dong-hyun said the acquisition of BC Card was aimed at addressing the convergence of communications and finance, and not a move to enter the credit card business.
Like Visa Inc and MasterCard Inc, BC Card processes credit card transactions for member banks, providing services to a combined 39 million cardholders nationwide.
KT and SK Telecom said on Wednesday that they would form partnerships with Japanese carriers to offer cross-border mobile payment services using NFC technology. KT has joined forces with NTT DoCoMo Inc, while SK Telecom has teamed up with Softbank Corp and KDDI Corp.
KT plans to sign deals to acquire a 20 percent stake in BC Card from Woori Bank and a 13.85 percent stake from Shinhan Card this month, and to complete the acquisition by May after regulatory approval. KT said it had already purchased a 1.98 percent stake in BC Card from Citibank.
A KT spokesperson declined to disclose the value of the planned deals.
KT said it was also in talks with Busan Bank to acquire part of a 4.03 percent stake owned by the bank in BC Card.
South Korean private equity firm Vogo Fund was currently the top shareholder of BC Card, with 24.57 percent, KT said.