Can Samsung Pay Boost Mobile Payments In India?
Samsung launched its own payment service, called Samsung Pay in India today that will be available on select Samsung Galaxy series devices. The launch of Samsung Pay makes Samsung the first smartphone company, ahead of Google and Apple, to launch its own payment service in India.
The official launch of the app comes around two weeks after Samsung introduced its mobile payment service for select users in India who signed up for its early access program. Samsung Pay is currently available in 14 countries including the US, China, Spain and Australia, with India and Sweden being the latest entrants. It was initially launched in August 2015 in South Korea. The new service can be game changing for India’s digital payment market, believe experts.
The new Samsung Pay is not only equipped with standard NFC (Near Field Communication), but also supports MST (Magnetic Secure Transaction) for offline payments at card terminals. In other words, this enables users to register their credit or debit card on the app and then use it at any establishment with a PoS machine.
Digital payment In the last one year, various initiatives by the Indian government under its Digital India program, resulted in the rise in mobile and internet transactions. The demonetization drive towards the end further pushed Indians to adopt digital payments and spearheaded India’s strive towards a less-cash oriented economy. The digital payments sector has seemingly been busy all throughout the year.
The digital payments industry in India will grow by 10 times to touch $500 billion by 2020 and contribute 15% of gross domestic product (GDP), according to a report by Google and Boston Consulting Group, which said that ever-increasing penetration of smartphones, the entry of several non-banking institutions offering payment services, consumer readiness to adopt digital payments, progressive changes in the regulatory framework will power the trend, it said.
While cashless economy is the way ahead for India, and with the launch of mobile payment services, the country is already moving towards it, security continues to be a major concern in the digital payment ecosystem, believe experts.
However, Samsung has claimed its there will be no storage of data on the servers and all transactions will be encrypted. The tech major has partnered with Axis Bank, HDFC Bank, ICICI Bank, Standard Chartered and the State Bank of India for the service. Samsung Pay has also been integrated with UPI and the Paytm wallet services, so as to ensure greater user security.
“Our insights show that convenience, security and acceptance are seen by consumers as the most important influencers when choosing among different digital payment options,” Asim Warsi, Senior Vice President, Mobile Business, Samsung India, said in a statement.
“With Samsung Pay, we give our consumers the smartest way to make digital transactions by far. Samsung Pay is highly secure through the signatureKNOX Platform, fingerprint authentication and tokenisation. We have partnered with major banks and card networks to give our consumers the widest range of choices, and are working on bringing more and more partners on board soon.”
However, Samsung Pay need not replace mobile wallets anytime soon, as it can only be used for payments at retail outlets at the moment, and also it only works with select Samsung handsets selling upwards of Rs20,000, making it inaccessible for many. While Samsung said it will bring its payment solution to the affordable range of smartphones - the J series - in its portfolio over the next few months, its success depends on its implementation and speed of adoption in the country.
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