LG is reportedly working on its own mobile payments system dubbed G Pay, making it the latest electronics firm to make a foray into the growing mobile payments industry after Google, Apple and Samsung.
A report from South Korean media outlet ET News claims Kim Jong Hoon, director of LG's product planning group announced during the company's unveiling of the LG V10 on Oct. 1 that LG is working on its own mobile payment service. However, he declined to provide further details about the solution, as it appears LG is still meeting with credit card companies and financial institutions to discuss integration of the new service into their products.
However, the company has been discovered to have filed a trademark application for the phrase G Pay, which was approved by the U.S. Patent and Trademark Office at the end of September. This follows LG's trademark application for the same phrase in South Korea, suggesting that LG will go the way of Samsung and will offer its upcoming service in the U.S., and possibly the rest of the world.
"Applying for trademark in [a] foreign country indicates that it will start its business in detail," says a financial industry insider. "It shared and gathered information about South Korean mobile payment technologies with [a] couple [of] card companies."
However, LG may be farther along than applying for a trademark. In fact, the company has reportedly been conducting tests for NFC-based payments using the LG G4 and the Watch Urbane in partnership with local prepaid provider Cashbee.
Apple Pay and Android Pay use the same technology to enable mobile payments, which may be a double-sided sword for LG. On the one hand, the company can take advantage of the traction already gained through the rise of Apple Pay, since it no longer has to convince merchants to upgrade to point-of-sale terminals equipped with NFC.
On the other hand, Android Pay already enables NFC-based payments, which means LG's system may have nothing unique enough to compel users to adopt G Pay. However, sources say LG is looking beyond NFC into other technologies that will accommodate a huge market of users. In other words, it may take a page out of Samsung's playbook and offer magnetic secure transmission payments similar to those made with magnetic strip credit cards.
"A possibility of accepting global technologies just like Samsung Electronics and Loop Pay cannot be ignored," says a high-ranking executive at a credit card company. "It will probably choose versatile mobile payment technologies that allow IC chips to be linked to G Pay."
LG is also reportedly planning to include a fingerprint scanner in the LG G5 to allow its next flagship to demonstrate the security benefits of using G Pay.
