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2015, the year mobile ate the wallet?

EE, Google, PayPal, Visa, Barclaycard and many other companies have all tried various physical mobile payment schemes over the past few years, with mixed levels of success. Now however, we are seeing the mobile payments ecosystem maturing, with payment providers and banks working with Apple, Google and Samsung to bring mobile payments to the real world.

According to a report earlier this year from IMRG and Capgemini, mobile accounted for 40% of online sales. Each year, billions is spent on both physical and digital goods and services. Smartphones and tablets allow us to buy anything, at any time.

EE, Google, PayPal, Visa, Barclaycard and many other companies have all tried various physical mobile payment schemes over the past few years, with mixed levels of success. Now however, we are seeing the mobile payments ecosystem maturing, with payment providers and banks working with Apple, Google and Samsung to bring mobile payments to the real world.

First announced at Mobile World Congress earlier this year, Samsung Pay is Samsung’s vision for making real-world payments with mobile devices. Unlike Apple and Android Pay, which rely solely on NFC for payments, Samsung Pay also utilises a technology called Magnetic Secure Transmission (MST). With MST, Samsung Pay enables users to pay for things on any card machine that features a magnetic reader.

This means that, according to Samsung, Samsung Pay can be accepted at around 30 million merchant locations across the Globe. Whilst an increasing number of merchant locations are upgrading their card machines to contactless terminals, this gives Samsung an obvious edge.

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Samsung’s ability to do this comes from its acquisition of LoopPay, the company that created MST, earlier this year.

As with Android Pay and Apple Pay, payments are authorised with the fingerprint sensor found on Samsung’s new flagship phones, the Galaxy S6, S6 Edge, S6 Edge Plus and the Galaxy Note 5. For the time being, Samsung Pay is only available in Samsung’s home country, South Korea, though there are plans to bring it to other markets in due course.

Despite Samsung being one of the leading Android manufacturers in the world, it has decided to use its own system for payments. This should come as no surprise to anyone familiar with the world of Android, where OEMs, such as Samsung have always included their own customisations for market differentiation.

As with Apple and Android Pay, Samsung Pay relies on payment partners such as Visa, MasterCard and American Express to process transactions.

With both Apple Pay and Samsung Pay, users need one of the latest devices in order to pay for goods in the real-world. As we’ve discussed before, Apple users with the iPhone 5 or 5S can circumnavigate this by buying an Apple Watch.

Android Pay, however, will be available to older devices, which feature NFC and a fingerprint reader. As many Android phones have had this technology for the past few years, it’s possible that Android Pay could eclipse Apple Pay in terms of potential users.

This week, Samsung announced that 80,000 credit and debit cards had been registered for the service since it was made available on 20th August. Of course, this pales in comparison to Apple Pay, where a reported one million cards were registered within the first 72 hours of launch in the US.

This isn’t a competition though. It’s a very positive sign that mobile payments are maturing and coming of age. With mobile already incorporating so many standalone devices that we used to have, it’s not long until physical wallets become retro items.

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