TCA Financial: Apple and Samsung are expanding their payment services to offer users the capability to use their mobile phones to buy services, which is a new revenue stream for both companies. The banks make a small charge for each transaction on iPhones, which is estimated to be 0.15 per cent in the US. Meanwhile, Samsung, trailing behind its major competitor in software and services, is adopting a different approach: the company will not allow any fees and instead will be using Samsung Pay to enhance its smartphone sales.
Colin Phipps, Chief Economist at TCA Financialsaid, “Samsung are a hardware company and the new payment platform is aimed at allowing people to appreciate their moble phones more. The companies’ payment services have been competitors in the US since September 2015, China for four months and Singapore and Australia just a week or more. Apple Pay is also available in Britain and Canada.”
In the United States, Apple Pay totalled $10.9 billion last year, which is miniscule when compared with China, where an estimated $1 trillion worth of mobile transactions were concluded last year, dominated by Alibaba and Tencent. But Samsung processed more than $1 billion in South Korea alone since its launch last August last year, which is still a tiny fraction of the country's $500 billion credit card transactions.
TCA Financial notes that Apple wants more control but that negotiations are complex. Samsung is the more accommodating of the two, to gain more flexible terms and conditions from banks and credit card companies. Both companies are looking to their payment solutions campaigns to enhance loyalty, while Samsung needs to have services like Samsung Pay so that it can gain an advantage over its competitors in the Android space, particularly with Chinese vendors.

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