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South Korean mobile operator KT Corp. is introducing the Samsung Galaxy S II for NFC payment and other services, a source at KT confirmed to NFC Times.

The telco, which launched NFC service last October with the Samsung SHW-A170K feature phone, this week is adding a second NFC phone, the Android-based Galaxy S II smartphone, successor to Samsung’s popular Galaxy S. The smartphone supports the single-wire protocol and applications on SIM cards, Eun-Seok Kim, deputy director for the m-financial business team at KT, told NFC Times.

Korea-based Samsung announced the Galaxy S sequel in February for release this month but had indicated the NFC version of the phone would not be available until mid-2011. KT is apparently getting an early version of the much-anticipated NFC phone. Kim said the telco has been testing the NFC version of the phone to get it ready for this month's launch. The phone supports the latest version of Google's Android operating system, called Gingerbread.

Reports say KT is introducing the smartphone with a promotional tie-in with big Korean retailer Lotte. The merchant will offer incentives for consumers to pay at Lotte Mart stores, said reports. Among other merchants that are reported to be accepting payment from KT NFC phones are GS Caltex, SPC Corp., Dunkin’ Donuts and Baskin Robbins.

It is unclear which credit card company is putting its application on the phones. KT in the past has said it will issue NFC-enabled SIM cards for its service, called "olleh touch," that would carry the popular T-money transit application for the capital, Seoul, along with as yet little-used mobile credit card applications. It will also support KT's membership-loyalty program and mobile-banking services that enable subscribers to make contactless withdrawals from ATMs and to trade stock. It's not clear whether these loyalty and banking services are available on KT's NFC phones yet.

KT this year bought a one-third stake in credit card processor BC Card and plans to take a cut of merchant fees when customers tap their phones to pay. But the telco, unlike rival SK Telecom, is not planning to get directly into the payment business. SK Telecom bought a 49% stake in the credit card unit of the Hana Financial Group last year.

KT also has an agreement with Japan’s largest mobile operator NTT DoCoMo to develop cross-border payment, ticketing and other services using standard NFC. The roaming agreement is set to go into operation late next year.