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Samsung Pay has proven both popular and profitable during its first month of use in South Korea, according to the company.
On Wednesday, Samsung announced that its mobile payments system took in more than $30 million in transactions in South Korea between August 20, when it launched, and September 20. The service has been successful with merchants and users, Samsung touted, generating more than 1.5 million transactions and recording around 36 percent of its users as active during the first month, with 10 percent of them using it every day.
“Although the details on Samsung Pay usage are constantly being updated, the response we’ve received so far has been beyond our expectations,” Samsung Pay head Injong Rhee said in a statement. “We knew Samsung Pay would be a game-changer in the mobile payments industry and now with the user data, we are seeing the greater impact it is having on consumer behavior and on the lifestyle of our customers.”
Samsung Pay is the company’s own mobile payments system, which lets users pay for items on the go at supported merchants using their smartphones. Following its launch in South Korea, Samsung Pay will sail to the United States on September 28. And that’s where the real challenge begins. Once in the US, the service will go head-to-head against Apple Pay and Google’s Android Pay. But Samsung Pay carries one distinct advantage. Apple Pay and Android Pay require NFC (near-field communications) support from merchants. Samsung Pay can work with non-NFC technology, so retailers don’t have to upgrade their equipment.
However, Apple Pay has a huge head start, having launched almost a year ago in the US and now available in the UK. That has given Apple the necessary time to sign up major banks, credit card companies and merchants. Samsung will have to go through the same lengthy process in order to gain a foothold in the US.
Of course, both services work on different devices and have a different audience. Samsung Pay is compatible with just four Samsung devices — the Galaxy S6, Galaxy S6 Edge, Galaxy S6 Edge+ and the Galaxy Note 5. Apple Pay supports the iPhone 6S, iPhone 6S Plus, iPhone 6, iPhone 6 Plus and the Apple Watch for in-store purchases. The service also works with the Pad Pro, iPad Air 2, iPad Mini 4, iPad Mini 3 for in-app purchases.
Samsung Pay will also support the company’s Gear 2 smartwatch after the wearable device launches in select countries. But it will require NFC for retail transactions.
The prevalence and popularity of each service could eventually be a deciding factor over whether someone buys an iPhone or a Samsung phone. But at this point, Samsung faces an uphill battle generating consumer demand for its phones. The company has seen its smartphone sales and market share continue to fall, while Apple’s iPhone keeps increasing its sales and cut of the market. In the US, Apple holds the lead with a 44.2 percent smartphone market share, according to data released by ComScore early this month. Samsung trails with a share of 27.3 percent.
Both services are also trying to make a dent in overseas markets. Samsung Pay is scheduled to expand to the UK, Spain and China soon, Samsung said. Apple has run into roadblocks launching Apple Pay in such regions as Australia and China due to concerns from banks over the high cut of transaction fees that the iPhone maker demands.
