11th March 2015
Mobile World Congress (MWC) is one of the biggest mobile conferences of the year, and as a result, exhibiting vendors and industry players pull out all the stops. Throughout the week, we are granted a glimpse of what the telecommunication and mobile industry could look like for years to come. And, perhaps most exciting, we are given a front row seat to the unveiling of industry giants’ latest projects, many of which have the potential to impact our daily lives. This year was no exception. On March 1st, Samsung revealed Samsung Pay, further shaking up the mobile payments industry and putting us one step closer to making mobile payments the new norm in the U.S. and beyond.
Mobile Payments: Keeping it Simple
Samsung Pay is a mobile payment platform that has the potential to compete with Apple Pay. Samsung Pay can be used at 90 percent of point-of-sale (POS) environments thanks to its magnetic secure transmission (MST) technology, while Apple is accepted at roughly five percent of contactless environments with near field communication (NFC). Furthermore, Samsung has offered an alternative approach in an area that Apple is typically known for – ease-of-use. With Apple’s iPhone 6 or 6S, users can easily access the wallet by touching the fingerprint scanner. Conversely, with Samsung Pay, users can avoid scanning their fingerprint and instead swipe up from the bottom of the screen in order to make their digital wallet appear. While the user experience of each platform is different, the goals of both are the same, in that they offer consumers a quick, simple way to pay for goods via mobile.
When designing Samsung Pay, Samsung considered ease-of-use in other ways, too. Aside from the consumer having to wave the Samsung Galaxy 6S or 6S Edge at the POS terminal, the phone does all the work. It detects which transaction it will conduct (MST or NFC) at the POS and goes from there. This is not to say that using Apple Pay at the POS is difficult – a universal NFC image on the equipment shows consumers where to tap their phone to complete a transaction. With both solutions, though, consumer education of the steps required to complete a mobile payment transaction will be critical for mass adoption.
Building Customer Loyalty with an End-to-End Strategy
When thinking about the mobile payments industry, it’s also important to consider what each technology will mean for merchants and retailers in their efforts to build a loyal customer base. With their latest foray into the payments market, Apple and Samsung have granted merchants and retailers opportunities in this space, both in the U.S. where mag stripe is still common for payments, and other regions like Europe and Canada where mag stripe is used to enable access and loyalty cards. With Samsung Pay’s MST-enablement, merchants and retailers in those areas can work with providers like Proxama to incorporate new services that add value to the consumer before, during and after a purchase, with tactics like BLE beacons or coupon redemption. Similarly, Proxama’s solutions allow banks and issuers to fall into place more quickly with platforms like Samsung Pay and Apple Pay. This supports the end-to-end enablement that is required to be successful in the fast-paced mobile payments ecosystem.
Undoubtedly, Samsung Pay holds a lot of promise. Not just because it offers consumers a new, streamlined way to pay for goods, but it also unlocks new revenue streams and opportunities for merchants, retailers and issuers. I look forward to tracking Samsung Pay’s progress and seeing how it holds up against Apple Pay and other industry players. Don’t forget to check the blog again next week for my recap on MWC and insight on how other recent industry news, like the official launch of Apple Watch, will impact the landscape as a whole.
Neil Garner, CEO & Founder, Proxama