Samsung reportedly mulling mobile payments move to counter Apple Pay

Smartphone giant Samsung is exploring the possibility of launching its own contactless mobile payment system, which may involve payment startup LoopPay, according to sources speaking to re/code. The rumour comes as Apple continues to brief the press that Apple Pay is going really well.

Samsung’s share of the global smartphone market has been declining of late, thanks mainly to pressure from lower-priced Chinese Android vendors but not helped by Apple rediscovering its mojo at the high end. As an aggressive, target-driven company Samsung is likely to be in a mild panic about this and leaving no remedial stone unturned.

The need to differentiate as an Android vendor has been clear to Samsung for some time and explains failed OS attempts such as Bada and Tizen. Samsung has also tended to fill its Android smartphones with unique software services, such as health apps, in a bid to differentiate them, but they have proven about as popular as its eyeball tracking features.

While it’s not remotely surprising to see Samsung attempt to react to Apple Pay as quickly as possible, it’s hard to see a Samsung proprietary payment system take off. In spite of Apple’s recent protestations, even Apple Pay is far from a sure thing. Apple seems to be doing a decent job getting retailers and financial service providers on board, but it remains to be seen if end-users warm to the concept.

If Apple Pay does take off there will clearly be the need for an Android equivalent, but this is surely far more likely to be provided by Google, in spite of the failure thus far of Google Wallet, than any Android vendor. Apple users accept proprietary features as part of the deal, but as Samsung is currently discovering, Android users are relatively happy to switch between vendors and are likely to be put off by proprietary services.

Having said that LoopPay seems to be a less intrusive technology, as one of its primary functions is to enable the wireless transfer of card data, via technologies such as NFC. In effect it seems to replicate existing contactless payment functionality embedded in newer bank cards and the ability to store multiple cards in your phone and pay with it could prove attractive, if that’s all Samsung has in mind.

It’s easy to see why Samsung might be tempted by a mobile payments move; it seems to have reached the limit of how much smartphone market share even its formidable marketing spend can buy it and must continue to strive to differentiate its products. Expect a few more moves like this from Samsung in 2015.