Menu
INSIGHT: Why Samsung's "forceful" Mobile Payments move hurts Google, not Apple...

INSIGHT: Why Samsung's "forceful" Mobile Payments move hurts Google, not Apple...

"It is clear that another potentially major player is now making a more forceful entry into the mobile proximity payment market."

Samsung’s acquisition of US mobile payments start-up LoopPay signifies an intensification of the rush to mobile payments development in the wake of Apple Pay’s launch.

Since being established in 2012, LoopPay has risen quickly from a Kickstarter crowdfunding campaign in 2013, through to an acquisition by technology giant Samsung in 2015.

According to Gilles Ubaghs, Senior Analyst, Financial Services Technology, Ovum, the high levels of attention being paid to LoopPay stem from its proprietary Magnetic Secure Transmission (MST) technology.

"As a result, a mobile proximity wallet rollout need not be dependent on wider contactless infrastructure development," Ubaghs says.

"Despite this novel solution to a key stumbling block to widespread mobile proximity payments adoption, LoopPay faces significant hurdles.

"Perhaps most critically, due to its reliance on mag stripe technology, LoopPay remains highly US centric, and holds less potential benefits in markets such as Canada, the UK and Australia, where contactless infrastructure is significantly higher than the US and rising.

"In markets that use EMV and have a high contactless penetration rate the benefit of using LoopPay is less clear."

Although many perceive LoopPay as a direct competitor to Apple Pay, and undoubtedly Apple’s payment service was a key driver in this move, Ubaghs believes Samsungs acquisition of LoopPay likely says more about its relationship with Google and the Google Wallet platform.

"Mobile payments are not yet a driver of handset sales and very few people will be basing their phone purchasing decisions on mobile payment functionality," Ubaghs adds.

"As long as it remains a ‘nice to have’ not a ‘must have’ feature the Apple Pay and LoopPay ecosystems will largely be mutually exclusive."

Ubaghs believes that LoopPay does however represent a more direct threat to Google Wallet which already makes heavy use of the NFC capabilities of many Samsung devices.

That said, he accepts that it remains unclear how Samsung will balance its introduction of LoopPay into its NFC enabled handsets running Android software.

"At this stage following Samsung’s acquisition of LoopPay it is clear that another potentially major player is now making a more forceful entry into the mobile proximity payment market," Ubaghs adds.

"There remain many unanswered questions, not least of which includes potential revenue models, security and compatibility issues and roll out strategy to global markets outside the US, but with Samsung’s considerable resources these developments will be difficult for competitors to ignore.

"This will likely only further increase the speed of development now occurring in the broader mobile payments space."

Follow Us

Join the New Zealand Reseller News newsletter!

Error: Please check your email address.

Tags samsungAppleovumGooglemobile

Featured

Slideshows

Arrow exclusively introduces Tenable Network Security to A/NZ channel

Arrow exclusively introduces Tenable Network Security to A/NZ channel

Arrow Electronics introduced Tenable Network Security to local resellers in Sydney last week, officially launching the distributor's latest security partnership across Australia and New Zealand. Representing the first direct distribution agreement locally for Tenable specifically, the deal sees Arrow deliver security solutions directly to mid-market and enterprise channel partners on both sides of the Tasman.

Arrow exclusively introduces Tenable Network Security to A/NZ channel
Examining the changing job scene in the Kiwi channel

Examining the changing job scene in the Kiwi channel

Typically, the New Year brings new opportunities for personnel within the Kiwi channel. 2017 started no differently, with a host of appointments, departures and reshuffles across vendor, distributor and reseller businesses. As a result, the job scene across New Zealand has changed - here’s a run down of who is working where in the year ahead…

Examining the changing job scene in the Kiwi channel
​What are the top 10 tech trends for New Zealand in 2017?

​What are the top 10 tech trends for New Zealand in 2017?

Digital Transformation (DX) has been a critical topic for business over the last few years and IDC is now predicting a step change as DX reaches macroeconomic levels. By 2020 a DX economy will emerge and it will become the core of what New Zealand industries focus on. From the board level through to the C-Suite, Kiwi organisations must be prepared to think and act digital when the DX economy emerges in 2017.

​What are the top 10 tech trends for New Zealand in 2017?
Show Comments