In 2016 You WIll Be Able to Shop Online With Samsung Pay

December 30, 2015     By : Sofia

Samsung Electronics plans to expand its mobile payment solution Samsung Pay in the US in 2016. The service will enable users to shop online and with more smartphones that support the electronic wallet, as reported by Reuters.

Samsung Pay has an advantage over its main rivals Apple Pay and Android Pay since the service has been launched in the US on September 28 with technology that is already widely adopted by most merchants. Apple Pay and Android Pay, on contrary, require retailers to install new equipment. In particular, Apple Pay (launched in September last year) requires retailers to install new NFC-compatible equipment with its service, which certainly affects the adoption rate among merchants as it adds an extra cost of implementation across the stores networks.

The service debuted in South Korea on high-end Samsung phones (including the Galaxy Note 5, the Galaxy S6 Edge, Galaxy S6, and S6 Edge Plus). Within the next year, it will most likely start being offered with lower-priced Samsung phones, as Thomas Ko, Global Co-General Manager of Samsung Pay shared in the interview with Reuters. A week earlier, he also commented that a wider “handset availability of Samsung Pay as well as online payment support is coming soon.”

The online shopping experience with Samsung Pay puts the company into competition with the established and actively used PayPal and new entrants like Visa with its Visa Checkout service. It may become a tough race since PayPal recently announced that its OneTouch service reached 10 million opt-ins.

Mobile wallets have been struggling to acquire active users. In fact, only 13% of adults in the US have digital wallets on their smartphones. Moreover, 76% of those who have a digital wallet have never used it or have almost never used it to make a purchase from a retailer in the past 30 days.

However, even with the all the hurdles to mobile wallet adoption, Ko commented that Samsung Pay is already the most widely accepted mobile wallet in the United States because it is compatible with both newer and older credit card terminals and does not require any special arrangements with retailers. For example, Wal-Mart or Target shoppers can use Samsung Pay by just hovering their smartphones with the app over the terminal. As the company reported in October, Samsung Pay had an average of eight transactions per US user within the first four weeks of its launch.

Even though Samsung Pay is relatively widely adopted, statistics on the perception of mobile wallets isn’t very promising. Among the consumers who have digital wallets, more than a third (38%) doesn’t see any benefits of using the technology.

Sometimes, adoption statistics vary significantly across studies. However, the last study performed by Gallup indicated a disappointing trend even with Samsung Pay adoption. Only 14% of people who have the Samsung Galaxy S5 and S6 have ever used Samsung Pay or Android Pay. With the service enabled for online shoppers, Samsung Pay has an opportunity to build a usage habit and transform online usage adoption into usage at physical POS.

Nonetheless, these are still early days for digital wallets, and Samsung Pay may have a chance to disturb even the most widely accepted digital payments providers. The following chart demonstrates the adoption among merchants and the plans to implement digital payments services from different providers (as of July 2015).

digital payments channels

Source: Statista.com

The main competitors for Samsung Pay’s online service are PayPal, Google Wallet and Apple Pay. Although, Google Wallet seems to intend to move its focus towards money transfer instead of payments with its recently announced opportunity to send money using just phone numbers in minutes. With Apple Pay’s facing controversies and hurdles to reach mass adoption, the 2% difference may soon be evened up. Android Pay is also competing with \the online shopping service from Samsung Pay with its recently enabled in-app purchases. However, with at least 100 mobile wallets in the US market with new ones getting added at a frequency of several months, nothing can be predicted confidently at the moment.

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Sofia

Sofia is a contributing writer for LTP based in New York. She is a market research professional skilled in data analysis and visualization. Sofia has an extensive experience in consumer behavior studies and marketing analytics. She is passionate about disruptive startups with innovative business models that are having a powerful impact on the industries.

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