Samsung Pay works on more merchant machines than any other option, but it’s competing in a very contested market against Apple and Google.
Samsung recently announced the U.S. launch of its mobile-payment service called Samsung Pay. The service allows users to make payments from their Samsung handsets at supported credit card machines. Samsung noted that its technology supports more credit card machines than Apple Pay and Google’s Android Pay. The claim was the first salvo in what is expected to be a long battle not only with competitors, but also traditional payment methods.
Mobile wallets have grown in popularity thanks to Apple Pay, which launched in 2014 The market was further boosted this year by the launch of Android Pay. Some of the world’s largest retailers, have formed the Merchant Customer Exchange (MCX) consortium to build their own mobile wallet, called CurrentC, which is slated to launch next year.
Mobile wallet technology uses near-field communication chips in smartphones to let users make payments remotely. Mobile wallets store user credit cards and once a user makes a purchase, a unique identifier code is sent from the smartphone to the receiver. The payment is made and the credit card number is never shared with the merchant.
“Mobile wallets like Apple Pay, Android Pay and PayPal intend to consolidate all payments across all channels into one easy-to-use, secure, portable payment method,” IDC Financial Insights research director James Wester said. “It’s intended to make payment anywhere convenient.”
Trillions of pounds are spent each year in commerce. By offering mobile wallets, companies—like Samsung, Apple, and others—can get a small slice of each transaction made through their services. If mobile wallets take off the revenue opportunities are massive.
“The physical wallet will at some point be replaced by something in the digital world,” Penny Gillespie, research director at Gartner said. “At the moment, however, digital payments on mobile are being used in small scale in many places, ranging from emerging countries with cash-only infrastructure to well-banked markets with and without credit.”
The mobile wallet market is still in its fledgling stages, Gillespie said, adding that so far, “most consumers appear uninterested in mobile payments and few retailers accept them—relatively speaking.”