Battle over mobile payment heats up

Global technology giants, including Samsung Electronics, Apple and Facebook, are moving briskly into the mobile payment market to capitalize on the rising number of mobile device users. / Korea Times file

Samsung, Apple, Facebook venturing to lucrative market

By Kim Yoo-chul

The competition in the mobile payment service market is heating up as global technology giants — Samsung Electronics, Apple and Facebook — are expanding into this rapidly growing segment.

Facebook is now speeding up its move to enter the mobile payment market. It is reported that the firm is in talks with three start-ups in London, which provide services in online and mobile international money transfer.

Samsung seeks to create a common platform that can connect its products in a single category.

The Korean company plans to upgrade its Samsung Wallet, a mobile payment tool that stores users' credit and debit card data, said company officials.

"Samsung wants to compete with Apple, Google, Facebook and even Alibaba in the mobile payments market. The mobile payment business has a huge growth potential. Samsung is searching for experienced workers in that industry," said a Samsung official.

He said people love being able to purchase content from music to movies and books from their mobile devices. However, they are concerned about the security of mobile transactions.

Samsung, which wants to move beyond being just a "big manufacturer" in the electronics industry, seeks to take advantage of the convergence between the technology, finance and automobile industries.

It is teaming up with mobile phone carriers in the global market to take advantage of mobile payments via its Galaxy line of devices.

In a recent meeting with local reporters, Hong Won-pyo, president of Samsung Electronics Media Solution Center, confirmed that the company will partner with interested parties to create its own common platform or operating system like Google Android.

"It will be tough for Samsung to suddenly cut its dependence on Google Android. However, Samsung has been consistent in finding the right targets to push the development of its ecosystem. If you have your own world, then you can expand more," said an official at one of Samsung's finance affiliates.

Samsung's mobile payment business is ideally positioned, as the company has business units, namely finance, data service, hardware and software.

However, its mobile payment business still has a long way to go, as Samsung Wallet has been downloaded only some three million times. Samsung said it will take more time for its mobile payment business to succeed.

Samsung Wallet is available in the United States, Germany, Australia and the United Kingdom, in addition to South Korea. It can be downloaded from Samsung Apps or Google Play.

"Simply put, Samsung isn't a software company. Its merits lie in manufacturing. We are gradually shifting our focus toward non-hardware businesses, which is time-consuming."

Apple, which already has an established mobile ecosystem, is mulling advancing into the mobile payment market because it already holds many consumers' personal data in their iTunes music accounts.

The latest study by Juniper Research, a leading research firm, shows that total transactions via mobile devices will rise to $500 billion this year from last year's estimated $360 billion.

To this end, the Cupertino operation is considering purchasing a San Francisco payments company, which Apple representatives in South Korea declined to name.

Experts said leading software companies are already putting resources to boost their payment businesses, diversify their business structures and generate profit more easily.

For example, Google and Facebook generate over 85 percent of their annual profits from ads.

Lee Jong-su, a professor at Hanyang University, said the payment business is the easiest way for software giants to make money because they already have a huge amount of users' personal information.

"Establishing a payment system is the most important. Once those systems are constructed, they can receive fees every time their customers use those systems via mobile phones," said the professor.

The saturation of the smartphone industry is another sign that the mobile payment market will continue to grow.

"The smartphone market is becoming saturated, meaning that they will become cheaper and more people will be able to afford them. They will then be able to buy content, tickets and other products and services. This means that the mobile payment market will see a meteoric rise," said an executive at LG Electronics.

Google and Alibaba are currently leading mobile payment innovations.

Google, which also has its own platform — Android — has clearly expressed its interest in the payment business. Google unveiled a service that enables users to send cash via e-mail. It will also improve and expand its existing payments services.

It will improve "The Google Wallet by connecting money transfer, fund investment and debit card functionalities," said a Google source by telephone, who asked not to be identified. Google launched Google Wallet in 2009, but it failed to gain much traction.