There are a large number of companies competing in the mobile or contactless payment market including banks, software companies and device manufacturers. To take three of the better well known businesses, Apple, Google and Samsung are all offering their mobile payment technology. Currently, the technology is only available in a small number of regions and works on a relatively small number of devices, but each business is working hard to broaden where the payment technology can be used. There are very good reasons why these businesses are going after the mobile payment: it reinforces the feeling that the mobile phone is an essential object to carry around and the businesses earn revenue through transactions via their service.
In many markets, Apple Pay was the first service made available. Customers with an iPhone 6 or newer (or with the Apple Watch and the iPhone 5 and later) can use the technology, which has been introduced in many parts of the world. However, whilst Apple may say that Apple Pay has been a success, away from needing a compatible bank and device, many customers simply don’t see the advantage in using a smartphone or smartwatch to pay for things compared with reaching for their purse or wallet. Richard Crone, chief executive of Crone Consulting, believes that relatively few customers with the necessary devices use them as a wallet. An analyst at Bloomberg Intelligence added: “For widespread adoption, there’s got to be something in it for the consumer.” Still, Apple does not disclose users but the industry estimates that there are around twelve million global users of the service, which launched in October 2014. Samsung Pay, however, has 5 million signed up users and has processed more than $500 million in transactions since it was launched in North America in September 2015.
Of course, Samsung was almost a year late to the US mobile payment market and in that year, people have become more used to the technology. Samsung also have an advantage in that their technology typically requires no investment from the merchant as their LoopPay system emulates a magnetic strip rather than requires NFC. However, only a small number of Samsung’s devices support Samsung Pay, mostly flagship models. Still, Samsung Pay is currently catching up with Apple Pay in terms of early user adoption and we will need to wait and see if this momentum is enough for the active users numbers to overtake. Meanwhile, one of the stumbling blocks for customers not leaving their plastic cards behind is that not all banks allow mobile payment systems and not all cards typically carried can be carried via a smartphone.