Samsung has taken a giant step in the direction of mobile payment by launching Samsung Pay in China. It has a tie up with China Union Pay, which is the only domestic bank card organization in the country. It will now enable contactless payments from Samsung’s Android smartphones.
“The reception of Samsung Pay since its launch has been extremely positive and the service has already seen tremendous success in terms of availability and adoption by consumers,” Injong Rhee, head of research and development, software and services of mobile.
At present, Samsung Pay supports credit and debit cards from nine major Chinese banks that include: CITIC Bank, China Everbright Bank, China Construction Bank, China Minsheng Banking Corp, China Gungfa Bank, China Merchants Bank, Hua Xia Bank, Industrial and Commercial Bank of China. It will have some more banks on the platform soon.
As of now, Galaxy S7, Galaxy S7 Edge, Galaxy S6 Edge +, and Galaxy Note 5 smartphones will support this new service. However, some mid-range models will be able to have this service soon. It will become possible through NFC compatibility instead of Magnetic Secure Transmission.
It will certainly put Samsung Pay above the services offered by its rivals Apple and Android Pay. After China, Samsung Pay is scheduled to launch in Australia, Brazil, Spain, Singapore, and the United Kingdom later in the year.
The scenario in China
There is a huge smartphone boom in China and around 68 percent people now own smartphones. Samsung Pay will have to face an uphill battle as the market is heavily dominated by Alipay and WeChat. They are quite popular in China. The telecom giant Huawei also launched its service recently.
Samsung said that its payment system is “simple, safe and easy to use” and that it works “virtually anywhere you can swipe or tap your card in China”.
Samsung is pushing its payment services in order to increase the brand loyalty of consumers. This will attract Samsung users to stick with the current smartphone.
China is a significant market for Samsung and the launch of mobile payment services offers a significant business opportunity. The growing middle class offers a lucrative market for this popular Android smartphone maker. More than 358 million people use payment system in China for financial transactions.
However, the path ahead will not be easy for Samsung as Chinese don’t think payment services like debit and credit cards, but as an add on services. Secondly, the brand image of the Korean manufacturer is not very good in China.
This means it is devoid of advanced features associated with Apple and Alibaba’s Alipay. If Samsung Pay projects it like a feature as good as a credit card. It can work in America, but not in China. This is just like an add on feature in China’s sixth largest smartphone maker. So it does not sound like a winning recipe.
Whatever may be the case, it will certainly help Samsung’s position in China. It seems a ripe time for the phone manufacturer as it has received a huge response after the launch of Samsung Galaxy S7.