Samsung Pay Hits the US Market
Nearly 12 months after Apple entered the US contactless payments market with Apple Pay, Samsung has followed suite with the launch of Samsung Pay. The vendor is clearly hoping that its MST/NFC-based combination offering will appeal to a US market that is only now implementing EMV and moving from swiping the card to CHIP & PIN at the point of sale, and where terminals are only gradually deploying or activating contactless payment.
Launched in South Korea in August, Samsung Pay achieved a respectable opening month in that market with around 1.5 million transactions worth $30 million, and with 10% of users paying via the service daily.
But while the service is supported by both MasterCard and Visa, together with several leading banks including Bank of America, Citi and US Bank, it may struggle to keep pace with Apple Pay, which saw more than one million consumers register credit or debit cards within three days of launch. A Gallup survey of US consumers conducted at the end of last year found that more than 20% of iPhone 6 users had used Apple Pay at least once: even if that proportion remains flat, that would translate into a US Apple Pay user base approaching 13 million by the end of this year.
The hurdle for Apple and Samsung to clear is repeat usage. Many consumers are believed to have used Apple Pay on one or two occasions, in part from curiosity: what is not clear is whether these initial forays into contactless have spawned a mobile payment habit. The fact that Apple has been reticent in supplying usage data suggests not, at least for the present time.
However, with more retailers rolling out infrastructure which supports contactless payment – and with the solidarity of the MCX retailer consortium evaporating, together with their opposition to Apple Pay – there should be a substantial increase in the opportunity for US consumers to pay via NFC, as we mention in our Mobile Wallets research. Greater opportunity for payment should in turn bring a greater affinity with the technology. At least, so Apple and Samsung (not to mention Google, which has just introduced Android Pay into the mix) will hope.