Users would be able to make payments through existing credit card readers via a magnetic signal from the phone, similar to how Samsung's payments system - launched in August 2015 - works.
Samsung and Apple are already operating their payments systems in more than 10 markets each, using the service to differentiate their handsets at a time of growing competition and slowing growth in the global smartphone market.
Apple charges fees on transactions made through the system, while Samsung does not.
LG did not elaborate on details including whether its payments service would expand to other markets, whether it would be supported on other devices or if it would generate revenue.
© Thomson Reuters 2017