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Analysts say technology companies are failing to cash in due to focus on replacing banking cards.
Samsung Electronics said its Samsung Pay mobile payment service clocked up 100 million unique transactions in the 12 months since its launch in August 2015.
The South Korean vendor registered at least 4 million Samsung Pay membership cards in the U.S. and its home market in the first year of availability. In its domestic market, some KRW2 trillion-worth (€1.5 billion/$1.7 billion) of transactions were conducted using Samsung Pay, at least a quarter of which were online transactions, the company said.
In addition to South Korea and the U.S., Samsung Pay is now available in China, Spain, Singapore, Australia, Puerto Rico, and Brazil, and is supported by 440 bank issuers globally, Samsung added.
Injong Rhee, CTO and EVP of software and services at the company’s mobile communications business, said the “strong consumer adoption” of Samsung Pay “signals a shift in behaviour and demonstrates the continued enthusiasm for a safer, smarter and better mobile wallet.”
A recent study by Javelin Strategy and Research backed up Rhee’s view on growing consumer adoption of mobile wallets, but highlighted that companies including Samsung, Apple, and Google are failing to convince consumers to continue using their services following the initial sign up.
In its Merchant, Bank Mobile Wallets Prove Value Where Apple, Google, Samsung Have Not report, Javelin revealed that overall consumer adoption of mobile wallets – including those offered by merchants and card issuers in addition to the three technology companies – grew from 11% per month in 2013 to 21% per month in 2015.
In contrast, the frequency of mobile wallet purchases per person fell from 3.7 transactions per month in 2013 to 3 in 2015, the company noted.
Emmet Higdon, director of mobile at Javelin, said Samsung, Apple, and Google are too focused on trying to replace regular plastic payment cards with their Samsung Pay, Apple Pay, and Android Pay services.
As a result, the companies “are missing valuable opportunities to enhance the overall purchase experience and create value where cards alone cannot.”
Javelin explained that consumers remain unconvinced that the technology companies’ mobile payment services offer a viable alternative to making payments via credit or debit card in terms of in-store purchases.
