DES MOINES, Iowa (9/18/15)--Following recent announcements from Samsung and Google regarding the rollout of their digital payment solutions, financial institution clients of The Members Group (TMG) are preparing their strategies to make the solutions available to consumers.
In a recent exclusive client webinar, TMG’s digital and product teams asked nearly 75 attendees if they plan to implement each solution. For both Samsung Pay and Android Pay, 86% of respondents said they plan to make the solution available to their cardholders. When asked which of the two solutions they believed would be more attractive to their cardholders, 54% said Samsung Pay, and 40% said Android Pay.
This week, Google announced the official U.S. release of Android Pay, the digital wallet available on all near-field communication (NFC)-enabled Android devices running KitKat 4.4+. Android Pay is now available to consumers through the largest U.S. issuers. Active credit and debit cards previously loaded into Google Wallet will also function inside Android Pay.
Android Pay is similar to Apple Pay and Samsung Pay in that it relies on NFC terminals for use in stores. Android Pay will also allow for in-app purchases and use of some merchant loyalty cards and special offers.
Although Samsung Pay comes with its own set of complexities, it has one distinct, stand-out feature: it will work almost everywhere credit and debit cards are accepted. That’s because in addition to NFC, Samsung Pay uses Magnetic Secure Transmission (MST), which mimics the technology used by credit and debit cards today. Thus, it’s expected to work at 90% of the country’s terminals.
It’s important to consider, however, that Verizon Wireless is not currently supporting Samsung Pay. “With Verizon being one of the largest carriers in the U.S., that’s a big problem for Samsung,” said said Director of Digital Payments Strategy Brian Day. “However, a lot of people anticipate a deal will be made between Samsung and Verizon.”
Another key consideration: Samsung devices are powered by an Android operating system. “Consumers with the latest Samsung smartphones may soon find competing payment solutions pre-loaded on their devices,” said Day. “Which solution Samsung device owners choose is likely to be influenced by both merchants and issuers.”
“The long-term impact of Apple, Google and others like Samsung remains to be seen; today, however, it’s clear they are generating a great deal of momentum around digital payments,” said Day. “As more consumers carry handsets with mobile payment options and more merchants begin to accept them, the closer we get to widespread adoption of a new way to pay. All indications are the payments industry is seeing the beginning of enduring disruption.”