Samsung Pay ups fight with Apple Pay in Australia with Westpac support; mobile payment expected to record a CAGR of 21.5% during 2017-2021

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Samsung Pay was launched in Australia in June 2016 revealing a three-year plan to offer credit, loyalty, gift cards, and public transport cards to customers in Australia. Initially the service was launched with support from American Express and Citibank. Australia is an evolved market in terms of mobile payments in comparison to US, where consumers still widely rely on Magnetic Stripe Technology (MST). In April 2017, Westpac became the latest bank to join Samsung Pay enabling its customers to make contactless payments using a range of Samsung Galaxy smartphones. With changing customer purchase patterns, competition in the mobile wallet industry has exponentially increased over the last three years. Samsung is negotiating with other leading banks in the country to join its payment service.

Apple and Samsung together own 40% smartphone market share across the globe and are also investing heavily in mobile wallet apps. Apple Pay works on terminals equipped with its NFC technology. Samsung Pay’s technology has an edge over Apple Pay as it can be used at both NFC and MST enabled payment terminals. Though banks and financial institutions are free to use both the payment services, it is possible that Samsung Pay might carry increased preference because Samsung Pay does not charge fee from its partners. Apple Pay charges transaction fee, which is around 0.15% per transaction in the US. Moreover, Samsung Pay will also be made available on its virtual reality headgear.

In late 2016, four big banks in Australia sought permission from the Australian Competition and Consumer Commission (ACCC) to commence boycott activities against launching Apple Pay. In March 2017, the ACCC announced that the collective bargaining of banks to boycott Apple Pay will, in most likely case distort competition. It will be interesting to see how the competitive landscape in Australia unfolds over the next few quarters. Australia is one of the largest and most promising markets for mobile payments globally. PayNXT360 expects, the Australian mobile payment market is expected to record a CAGR of 21.5% from 2017-2021 to reach US$ 1,41,459 million in transaction value terms by 2021, increasing from US$ 64,972 million in 2017. In 2016, the market registered a growth rate of 29.3% over 2015, to reach US$ 51,090 million.

To know more and gain deeper understanding of mobile payment industry in Australia, click here.