South Korea's Samsung Tuesday announced the launch of its mobile payment service in China, where it is likely to struggle in an already crowded market that arch-rival Apple entered nearly six weeks ago.
“We are pleased to be partnering with CUP to bring Samsung Pay to China,” said Injong Rhee, EVP and Head of R&D, Software and Services of Mobile Communications Business at Samsung Electronics. “The reception of Samsung Pay since its launch has been extremely positive and the service has already seen tremendous success in terms of availability and adoption by consumers. We ultimately want to make Samsung Pay available to as many consumers as possible in china, so that everyone can have the opportunity to enjoy the simplicity, safety and convenience of this mobile payment solution.”
Samsung launches Samsung Pay in China
The world's second largest economy is also the world's biggest smartphone market, and Samsung Pay has a powerful partner in China -- bank card provider UnionPay -- which has links to the central bank. But unlike most other countries, mobile payment systems are already well-established in China, with local providers dominating the market.
“China UnionPay attaches great importance to the security and innovation of payment. In order to follow the tendency of mobile payment in both China and abroad, CUP cooperates with industry to bring safe and convenient mobile payment experience for millions card holders. With the joint efforts of banks and Samsung, based on the safety testing and certification by relevant national testing agency, CUP QuickPass starting Samsung Pay service will bring users safer and more convenient mobile payment choice.” said Hu Ying, Assistant President of UnionPay.
As an outsider Samsung will also have to compete with Apple, which launched its own Apple Pay system last month -- also in partnership with Union Pay. The South Korean electronics giant said its service currently supports selected credit and debit cards from nine Chinese banks and is available on its top-end Galaxy smartphones, with mid-range models to follow.
Like its California-based rival, Samsung Pay's initial challenge will be securing a foothold in such a competitive market place. China had 359 million online payment users in mid-2015, up almost 18 percent in six months, according to the state-backed China Internet Network Information Center.
Mobile transactions were valued at some 9.3 trillion yuan (1.4 trillion US dollars) last year, up an annual 57 percent, one industry estimate showed. The dominant mobile and online payment providers are e-commerce giant Alibaba with nearly three-quarters of the market, followed by Tencent -- operator of the popular messaging app WeChat -- which has some 17 percent, according to Beijing-based BigData Research.
A major issue for Samsung is the recent downturn in the popularity of its smartphones in China. It was China's top smartphone maker in 2012 and 2013, but domestic manufacturer Xiaomi took the throne in 2014. In the fourth quarter of last year, Samsung ranked sixth in China with a 7.0 percent market share, compared to 13 percent for third-placed Apple. The Apple brand commands a strong following in China, especially as a status symbol among the emerging middle class. (AFP)