SHANGHAI, March 5, 2016 (BSS/Xinhua) – Shortly after Apple launched its payment service in China, competitor Samsung unveiled Samsung Pay, adding kindling to the already heated mobile payment market.
A representative with Samsung told Xinhua on Saturday that the company will officially launch Samsung Pay this month via a partnership with China UnionPay,a bank card clearing service provider responsible for all bank card transactions on the Chinese mainland.
Launched in the Republic of Korea and then the United States in the latter half of 2015, Samsung Pay attracted a 5 million registered users in six months,with transaction volume via the app exceeding 500 million U.S. dollars. Since late February, Samsung has started public tests for the app in China.
Users of Samsung Pay can complete transactions by placing their mobile phones near the card slots or the NFC reading areas of compatible point-of-sale (POS)terminals.
But while Apple Pay needs UnionPay’s NFC compatible POS machines, Samsung Pay can be used with POS terminals without the NFC functions. Users can also draw money from automatic teller machines with the Samsung service. Samsung plans to incorporate in the app card-swiping functions for public transit in some Chinese cities.
Samsung Pay has so far forged partnerships with seven banks in China during the public tests, and more are expected to jump on the bandwagon, according to Samsung.
Samsung said the service is launched to “attract more new users” in the mobile market.
China’s mobile payment market is emerging. Last year, 620 million people in China, or 90.1 percent of the nation’s Internet users, used a smart device to go online, according to the China Internet Network Information Center
China’s third party mobile payment market was valued at 16.36 trillion yuan in 2015, according to research firm Analysys. Alibaba and Tencent dominated the market. Alibaba’s Alipay held 71.51 percent of the market in the third quarter last year, while Tencent’s Tenpay had carved out a 16 percent share, Analysys data shows.
“Curiosity will definitely drive a lot of sign-ups, but the key challenge is how to turn this initial interest into habits in the long term,” said Sandy Shen, research director at technology consultancy firm Gartner.
Alibaba and Tencent have spent the past two years working to address that challenge. The two rivals have been locked in a breakneck race to lure consumers to their mobile payment service. Progress came after both splurged heavily to offer discounts.
Value propositions are, therefore, critical in persuading the country’s penny-wise users to switch to a new payment service, Shen said.