Samsung Pay will struggle to match Apple Pay hype and faces other hurdles
Here we go again.
This time, the plethora of over- excited PR pitches and ludicrously exaggerated projections for take-up relate to Samsung Pay. Samsung has now partnered with MasterCard and Samsung Pay is slated to roll out in the UK later this summer.
If PRs are to be believed, Samsung Pay, now partnered with MasterCard, has a killer feature that will have retailers falling over themselves to offer the service at the earliest opportunity.
Words being used to describe the offering include the predictable ‘innovative’ and ‘groundbreaking’.
Groundbreaking? Really. Samsung Pay will allow users to create a virtual wallet; they will be able to pay for goods using debit, credit and prepaid cards. The transaction limit will be £20, rising to £30 in September.
Except that Samsung is not Apple. It is doubtful if Samsung will generate the amount of hype that accompanied the launch of Apple Pay. Then there is the question of handset fragmentation. Samsung Pay will work with any handset as long as it happens to be the S6 and S6 Edge model.
Samsung ended July by posting its quarterly earnings – a fifth successive quarter when profits dropped- and confirmed analyst forecasts that sales for the S6 models were disappointing.
At the start of August, Samsung shares were down 8% for the year to date so its shareholders will haredly be enamoured of the firm’s current performance.
For the writer’s part, with two S5 models to hand and having previously used the S3 and S4, no tears are being shed.
So far as this hitherto loyal customer is concerned, Samsung foolishly binned two differentiating features from the S6: the removable battery and micro SD slot, so I will not be upgrading to a S6 nor using Samsung Pay.
That small matter aside, it will be fascinating to track the launch of Samsung Pay in the US followed by South Korea.
Samsung remains tight-lipped as to exactly when Samsung Pay will be launched in the rest of the world, saying only that trials are ‘in preparation for full rollout’.
In the US Samsung will benefit from the ability to support magnetic strip technologies in older sales terminals as well as NFC POS terminals. That will at least help to distinguish the offering from Apple Pay.
For those of us sceptical about Samsung Pay being a game changer, there are two main arguments. The first is Android Pay – that service will be compatible with rather more handsets than Samsung Pay.
The bigger hurdle, especially in the US, is the latest evidence of consumer apathy towards mobile wallets.
Gallup – so about as good a consumer surveying source as you will get – reported in mid July that only 2% of Americans are using digital wallets. Although 13% of smartphone owners have a digital wallet app installed, 76% of this number rarely if ever uses it.
Only 4% of smartphone users say they are extremely likely to start using a digital wallet in the next 12 months, while 53% of them say they are extremely unlikely to start using a digital wallet, according to the Gallup survey.
The columns of this title and of course online at www.electronicpaymentsinternational are of course open to those Samsung Pay evangelists who want to take issue with the above comments.