Billions vs. 500 Million
Samsung Electronics said on Feb. 4 that it has signed an agreement with the U.S.-based bank
Wells Fargo & Company to expand the coverage of its mobile payment platform Samsung Pay.
Earlier the South Korean device maker made similar deals with Bank of America, Citibank and Chase Bank of the United States.
Samsung Pay is also expected to be launched in China this month, while planning to make inroads into the other markets such as Australia, Brazil, Singapore and Britain. Samsung Electronics said its Samsung Pay service is now up to 5 million users in South Korea and the U.S., with the users spending US$500 million over the last six months after its debut in September 2015.
Apple and Google haven’t released actual numbers, but Crone Consulting LLC estimates that Google’s Android Pay, which debuted in September 2015, has 5 million monthly users, while Apple has about 12 million since its debut in October 2014.
Although actual numbers weren’t shared, Apple CEO Tim Cook recently said that its customers have spent billions of dollars with Apple Pay that is already available in the United States and China as well as a handful of other countries. Furthermore, Cook claimed that the rate of growth during the second half last year was 10 times greater than that in the first half of the year. Noting that the result was recorded before Apple introduced the payment platform to the China market in February, some industry experts in the US said that Apple Pay's growth will continue to significantly outpace that of Samsung Pay in the future.
Combining the users of Android Pay and Samsung Pay, both of which are run on Android, the figure reaches 10 million. However, it’s unclear how many of those users signed up for both Android Pay and Samsung Pay. According to one analyst cited in a Wall Street Journal, Samsung is trying to build a Samsung ecosystem by strengthening its software and services sector in order to tie up its customers in its system. Other analyst in the US also claim that the barriers to prevent Samsung Pay users from moving to Android Pay are virtually nonexistent, saying that other Android-based smartphones are anytime able to implement their own Android Pay.
According to them, Samsung's strength isn't in software and services, but in the top-of-the-line hardware specifications including chips for mobile devices. They say that Samsung will continue to try to become a software- and services-focused company, but eventually and merely have its own mobile payment service like its so many other flagship devices that it has introduced over the years.
However, many experts home and abroad point out that Samsung does have an advantage over the others. Samsung purchased LoopPay in February 2015, which has been applied to Galaxy phones with the same function as the magnetic secure transmission technology, which used in POS terminals that do not have NFC capabilities. It means that Samsung Pay can be used on any terminal while Android Pay and Apple Pay can be used only on terminals that enable mobile payments through near field communications (NFC).
Anyway, newer technologies would be the key to the global IT giants’ race to the top though all three mobile payment solutions have their own strength, which makes it difficult to forecast who’s going to come out on top in the market of mobile payments, which will exceed US$142 billion by 2019 according to US-based researcher Forrester Research Inc.. Now, Google’s Hands Free, a service that makes mobile payments possible with voice, is already available on Android and iOS as a beta test in the US.