Mobile Payment Services: Samsung Pay to Take Over?

by on Feb 08, 2016

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Over the course of January, Samsung and Android mobile payment services expanded to more bank and credit card firms, and mobile payment service promotions continue as firms add the capabilities to their card catalogs. In January, PNC Bank and KeyBank added Samsung Pay for credit card products and MasterCard debit and credit cards, respectively. Even though American Express has offered Samsung Pay for months, the firm just added an informational page on the public website about the product’s features. TD Bank added to the mobile payment sphere as well with Android Pay for its Visa debit, credit and prepaid cards. With continued adoption of mobile capabilities by bank and credit card firms, it is worth exploring the current mobile payments landscape.

Apple Pay launched back on October 20, 2014. Upon launching the product, Apple had three major credit card providers and six banks backing it. Since then, the secure payment service is offered by 16 of the 18 firms in the Bank Monitor coverage group, as well as all 11 of the credit card firms in the Credit Card Monitor coverage group. Apple Pay continues to grow its merchant list as well, with 55 current retailers, 23 soon-to-be merchants and 38 apps listed on its Where to Use Apple Pay webpage.

A little less than a year after Apple Pay launched, Google rolled out Android Pay, followed shortly after by Samsung Pay. Android Pay is compatible with six major firms in the Bank Monitor coverage group and eight Credit Card Monitor issuers, while Samsung Pay is available at four banks and seven credit card issuers.

With all the mobile payment options for consumers, are these services being used, and are they necessary? In October of 2015, Time.com reported in an article that “only 9% of consumers use mobile payment when it’s available.” Perhaps the low usage numbers indicate that consumers are not ready to let go of their wallets. With even more services available now, a larger problem might emerge that with all of these competing services, customers do not know what is accepted where.

Though users must have one of five different Galaxy devices to use it, Samsung Pay stands to offer the best solution to potential confusion surrounding mobile payment services. Samsung Pay uses Magnetic Secure Transmission (MST) technology. The tech came as part of the acquisition of LoopPay back in February of 2015. With the use of MST, Samsung Pay eliminates the issue that comes with a lack of NFC-enabled retailers. Merchants do not need to upgrade from magnetic strip card readers for their customers to use Samsung Pay.

Samsung Pay seems to be taking advantage of the feature with its recent advertising, as comedian and actor Hannibal Buress uses the service at the famous Katz’s Delicatessen in New York City. The commercial highlights the flexibility that comes with MST technology. With this advantage over the Apple Pay design, it stands to reason that the only thing standing in the way of Samsung Pay moving its users toward mobile payments is a higher rate of adoption by major banks and credit card issuers.