This week Samsung claimed that it now has more than five million registered users and has processed over 500 million dollars in the first six months, in the two markets where it is available: the US and South Korea.
“Since its introduction last year, Samsung Pay has changed the way people pay and use their smartphones,” said InJong Rhee, EVP and Head of R&D, Software and Services of Mobile Communications Business at Samsung Electronics. “We’ve already seen significant consumer adoption and we continue to see great momentum. Our aim is to expand Samsung Pay to even more locations around the world, and our customers should expect to see more features in the year to come.”
A key advantage Samsung Pay has over its Apple counterpart is the fact that it works with older card readers by emulating the magnetic stripe on the back of cards. That means merchants don’t need to upgrade or change their current terminals – a hurdle that will likely put (especially smaller) vendors off.
Furthermore, this year Samsung Pay will start expanding on a global scale beginning with China in March, followed by Australia, Brazil, Singapore, Spain and the U.K. later in the year. Additionally, Canada will be added to the new launch roadmap.
Meanwhile Apple Pay, and to a larger extent Apple, has been taking some hits in recent months. First, it was deposed by Google’s parent company as the world’s biggest company. Then it became clear that the company’s iPhones, which account for 60 per cent of the revenue, were facing a slowdown in sales causing its share to drop by 8 per cent in a year to February.
More recently, the firm announced that Apple Pay would go live in China on 18 February. While a massive coup if it can pull it off, it looks to be an uphill battle. The American company allegedly blinked first in negotiations with Chinese banks, which led to a deal being secured that will see the company earn just half of what it earns in the US for every Apple Pay transaction in China, according to The Cult of Mac.
China is an important market for Apple, but in payments the firm is trying to break into a market where one company has a powerful monopoly over consumers’ digital spending, with Alipay commanding a formidable share of the market. Meanwhile, Apple’s technology is different. The giants of the Chinese market, Alipay and Tencent’s WeChat mobile wallet, both back the QR-code technology. Upon the actual launch, reports emerged that showed it didn’t go as planned. Due to the vast amount of people signing up to the service, Apple’s servers simply crashed. Not an encouraging start.
However, none of this is as significant as the problem that Apple still hasn’t resolved in its established markets: people are simply not using Apple Pay. In Australia, that’s pretty much because the major banks are very much against it, instead preferring to use their own services. In the US, a recent study by Trustev found that only one in five people who have an iPhone that supports Apple Pay actually even tried the service. Of the people who use the service, over half (56 per cent) actually said they don’t use it more than once a week.
But all of these are no more than guesstimates as Apple itself is keeping schtum on the matter. But since that is all we have, one more can’t hurt: whereas Samsung officially confirmed that it has five million registered users, Trustev estimates that Apple Pay users around the world total up to three million people.
It will be interesting to see how Apple fares in China, not only against the established players, but very soon against its bitter rival. Will China be the stage where one of Apple and Samsung deals a decisive blow?
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