The Journal of Applied Business Research – September/October 2014 Volume 30, Number 5 Copyright by author(s); CC-BY 1365 The Clute Institute A Comparative Study Of Smartphone User’s Perception And Preference Towards Mobile Payment Methods In The U.S. And Korea Seungjae Shin, Mississippi State University, USA Won-jun Lee, Cheongju University, South Korea Dustin Odom, Mississippi State University, USA ABSTRACT As the Smartphone adoption rate increases, Smartphone users pay more attention to mobile payment. There are several options for mobile payment but there is no dominate method. Proximity mobile payment is the newest form of mobile payment. Security, cost, and convenience are three main factors Smartphone users keep in mind when making a mobile payment. This paper investigates Smartphone users’ perceptions and preferences toward mobile payment methods in Korea and the U.S. U.S. Smartphone users have a willingness to pay more for a secure mobile payment transaction, even though Korean users have more experience in the mobile payment frequency. Among the three factors, mobile security is the factor of strongest influence on mobile payment frequency in both countries. Keywords: Mobile Payment; Mobile Banking; Mobile Shopping; Mobile P2P; POS Payment 1. INTRODUCTION obile payment is payment through mobile phones or mobile devices. Mobile payment is defined by “any transaction on a mobile handset where ownership of money changes hands” (Pope et al., 2011), which can be classified into two forms: remote transactions or proximity-based transactions. Mobile payment is in its early stage and it is cooperated by banks, credit card companies, wireless carriers, and processing companies. It is now starting to catch on in the many developed countries due to the increase in popularity of Smartphones like the iPhone. The Smartphone is a combination of the cellular phone and the personal computer. The adoption of Smartphones has led to the online banking and online shopping consumer to transition into using their Smartphone for these transactions. In the early 21st century, mobile banking originated from the SMS text messaging, which was supported by the 2G mobile technology. SMS mobile banking was a way to make the user’s cellular phone a banking tool through text messaging. SMS mobile banking is utilized through two types of messages. One way is through push messages that the bank or financial institution sends to users to inform them about transactions that were performed using the accounts. The second type of message is the pull message where the user initiates the communication with the financial institution in order to receive a one-time password when using mobile banking (Rotimi et al., 2007). With the advent of 3G mobile technology, users started to conduct internet banking with their internet enabled mobile devices. As the 3G technology gained popularity, banks and online merchants redesigned their websites to be accessible by mobile devices. This method is very similar as internet banking/internet payment and mobile users use wireless internet access for their payment. According to the Cellular Telecommunications & Internet Association’s (CTIA) wireless industry statistics (http://www.ctia.org), the number of mobile phone subscribers in the United States is estimated to be over 326.4 million as of December 2013 and wireless penetration rate is 102.2%, indicating the saturation of the U.S. wireless M