Tag: smartphone payments

In China nearly two thirds of all shoppers are now regularly using wallet apps to complete purchase transactions.

A new report revealed that almost two out of every three Chinese consumers use smartphone mobile payments regularly. The report was aimed at better understanding the country’s internet development. China Internet Network Information Center conducted the study and revealed the results of its data analysis.

The report showed 64.5 percent of Chinese smartphone owners use mobile payments to buy products.

That figure represents about 424.5 million people in China. These figures are as up to date as June 2016, which represents some very recent insight into this smartphone mobile payments trend. It also shows an increase in usage of 7 percent since December.

Aside from mobile wallet use, the report on the study also stated that there are 710 million internet users in China. This is nearly double the entire population of the United States. An estimated 656 million internet users connect to it via mobile devices.

The rapid growth in smartphone mobile payments is credited to the quick development of the necessary infrastructure.

The ecosystem needed in order to implement mobile wallets was adopted very swiftly in China, said the report. Recently, Samsung Pay and Apple pay have also entered the mobile payments market in China. This has given the sector’s growth a shot in the arm.

A rising number of manufacturers such as Xiaomi and Huawei launch NFC technology enabled smartphones. The result is a greater compatibility with many mobile payments tech requirements. Near field communication is the technology behind many large mobile wallets such as Apple Pay. The more consumers have NFC enabled smartphones, the greater the ability to actually use the mobile payment apps.

According to IDC research firm senior analyst, Michael Yeo, “Mobile payments have become a part of life in China now, driven by a combination of factors including e-commerce and mobile commerce, and services such as taxi-hailing apps.”

Yeo also explained that the success of smartphone mobile payments is as great as it is as the Chinese market is less influenced by legacy payment methods. Credit cards and banking cards are not as ingrained in Chinese society. Moreover, many people in the country use the internet exclusively over mobile devices.

The Korean electronics company sees its wallet app as a way to sell its devices, not fee-based revenue generation.

Samsung mobile payments are taking on rivals in the United States by using a different approach from what already exists. The company explained its goal to use the wallet app to sell smartphones over collecting fees.

This is a drastically different perspective on mobile wallets when compared to top rival, Apple.

Apple uses its mobile wallet as a part of its overall ecosystem. That said, Apple Pay, like other smartphone payment apps, is struggling for widespread and mainstream adoption. Meanwhile, its top competition, Samsung mobile payments, is going in a new direction. Samsung Pay is a strategy to encourage consumers to buy the company’s devices.

As such, this move breaks away from the typical mobile wallet model. Usually, mobile payments generate revenue through fees paid by financial partners and/or merchants. In Samsung’s case, it is an added selling feature for smartphones, tablets and other gear.

Samsung mobile payments will not be collecting usage fees from its financial partners.

Conversely, Apple Pay is a mobile wallet that mainly generates income by requiring its partner banks and financial institutions to pay a small charge for every completed transaction. The actual figure has not been publicly released. Equally, some reports have indicated that in the United States, it is a fee of 0.15 percent of the transaction.

On the flip side, Samsung Pay does not require its financial partners to pay a fee for its use. Instead, the electronics company aims to make it appealing to consumers, merchants and banks. That way, it will become widely available for use and will be a selling feature for its devices. This strategy uses the mobile wallet as a sales feature, not a revenue generator unto itself.

According to Samsung Pay global vice president, Elle Kim, “We’re a hardware company, and at the end of the day I think what we’re trying to do is get people who hold (one of) our phones and use it…to just love it more.” It will be interesting to see how the Samsung mobile payments strategy works against the competition.