BC Card is developing the ``Smart Wallet'' in collaboration with technology gurus at Korea's Electronics and Telecommunications Research Institute (ETRI). This, the company hopes, will become a new national standard for payment when they finish development by 2013.

The concept of the mobile wallet is not a novel idea in Korea, where telecom firms have introduced short-distance radio frequency chips embedded in mobile phones. But the one being studied by BC Card and ETRI could bring fundamental changes in the way people shop and dine.

The first reason is BC Card's clout in the economy ― it is not an ordinary credit card firm. Though it has its own credit card brand, its main activity is the operation of Korea's largest credit card network.

The firm processes transactions for its 11 member banks. Some 20 million Koreans, or 40 percent of the population, hold at least one BC membership through the banks, and some 54 million cards are currently in use.

In short, BC is the de facto national standard of the Korean credit card market. And ETRI, the leading state-owned research agency, can pave the way for the technology to become the normal payment system by solving regulatory issues.

The Smart Wallet also has major technological advantages over previous versions of mobile phone payment systems ― no additional hardware will be needed, and one program will serve for multiple credit cards.

``It may be something like a software application,'' a company spokesman said. ``When you pay the bill, the application will automatically tell which of your credit cards will be the most beneficial. For example, if a certain card membership has some discount schemes for the restaurant, then it will let you pay with that card.''

Of course, the card itself also incorporates the software program. Furthermore, it can also act as a personal identification or drivers' license. Though its specifications are not yet fixed, it could be something like an electronic barcode, he added.

The credit card market in South Korea is saturated with 21 players ― commercial banks or credit card-only firms.

They have also learned that aggressive marketing can bring disaster. Back in 2003, the over-leveraged credit card firms were bailed out by the government and the number of the cards issued was reduced by 20 percent. So future growth must come from elsewhere, they know.

The combination of mobile phones and credit card services is appealing, because most people carry both of them anyway.

The Smart Wallet initiative is a long-term strategy by BC Card, but the same idea is already being implemented on a smaller scale. The company will start issuing credit cards in the city of Daegu that can be used to pay for public transportation, parking, highway tolls, utility bills and even vending machines within the next few months.

If successful, the system can be exported to other nations, the company says. ``The Daegu model will be the framework when we start selling public transportation cards in other countries,'' the spokesman says.

Going digital and wireless is good. But BC Card also tries to appeal to the emotional aspect of card users. There is the ``Perfume Card'' with the aroma of popular perfumes, which can be recharged once a month. And there is the ``Hanji Card,'' which has the natural texture of traditional Korean paper.

Unlike plastic cards, the paper card is bio-degradable. For people who like the resilience of plastic, then the firm recommends one made from corn starch, which is as strong as ordinary cards. These items were exhibited at Cartes & IDentification, the largest expo of the industry, last year, where BC became the first Korean company to feature its products.