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 newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags mobileGoogleApplesamsungovum

Brand Post

How to become the best IT MSP

This article provides guidance for managed service providers (MSPs) that want to grow their business. It is also useful for any IT service provider looking to move from the break-fix model to managed IT services.

Featured

Slideshows

Reseller News Innovation Awards 2019: meet the winners

Reseller News Innovation Awards 2019: meet the winners

Reseller News honoured the standout players of the New Zealand channel in front of more than 480 technology leaders in Auckland on 23 October, recognising the achievements of top partners, emerging entrants and innovative start-ups.

Reseller News Innovation Awards 2019: meet the winners
Malwarebytes shoots the breeze with channel, prospects

Malwarebytes shoots the breeze with channel, prospects

A Kumeu, Auckland, winery was the venue for a Malwarebytes event for partner and prospect MSPs - with some straight shooting on the side. The half-day getaway, which featured an archery competition, lunch and wine-tasting aimed at bringing Malwarebytes' local New Zealand and top and prospective MSP partners together to celebrate recent local successes, and discuss the current state of malware in New Zealand. This was also a unique opportunity for local MSPs to learn about how they can get the most out of Malwarebytes' MSP program and offering, as more Kiwi businesses are targeted by malware.

Malwarebytes shoots the breeze with channel, prospects
Show Comments