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Samsung Pay and Apple Pay will soon be launched in Singapore, making it the first port of call for the mobile services in the Association of Southeastern Asian Nations (Asean) region.
Samsung and Apple smartphone users will be able to tap their phones to make purchases where credit and debit cards are accepted.
Samsung Pay supports major payment networks American Express, MasterCard and Visa, and major banks such as DBS/POSB, OCBC Bank and Standard Chartered.
Apple Pay is currently available for the American Express-issued credit cards, and banks such as DBS Bank, UOB and Standard Chartered. Visa will provide the service in the coming months.
There are differences in the retail outlets that support these payment services. Samsung Pay allows users to make payment at almost all retail outlets that accept credit cards, working with both near-field communication (NFC) terminals, as well as the traditional magnetic-stripe credit card terminals.
Users of Apple Pay can use their iPhone, iPad or Apple Watch to make payments in stores that accept contactless card readers with NFC wireless capabilities.
“We are extremely excited that Singapore is the first market in Southeast Asia to roll out Samsung Pay,” said Injong Rhee, executive vice-president and head of research and development, software and services of mobile communications business at Samsung Electronics.
“Singapore’s connectivity and openness are ideal conditions for our mobile service to thrive, together with the interest and readiness of consumers here in adopting this new method of payment,” he added.
Singapore is ready for such mobile payment options, as it has a strong “card culture”, said Sui-Jon Ho, market analyst for IDC Financial Insights Asia-Pacific.
“Some 80% of the population are active debit card users, and 31% are active credit card users. The perception that online payments are inherently unsafe – a stigma still prevalent stigma across the Asean region – is somewhat absent among Singaporeans,” said Ho.
Digital payments growth in Singapore
According to MasterCard’s Mobile Shopping Survey 2016, digital wallets have seen the fastest uptake among Singapore consumers, with a four-fold increase over the past year. Meanwhile, Visa said more than one in three Singaporeans are making Visa payWave contactless payments.
Digital wallet services in Singapore are currently available, such as SingTel and Standard Chartered Bank’s Dash, DBS’s PayLah!, OCBC’s Pay Anyone and Maybank’s Mobile Money.
Ho added that mobile digital wallets have yet to really take off in Singapore, a country where the typical online checkout behaviour is a combination of traditional card payments with secondary digital functions , such as loyalty accounts, virtual coupons and proximity scans.
Read more about mobile payments
- Apple’s mobile payments service is popular with consumers and banks, but the company has yet to find ways to make ‘meaningful’ money from it.
- Samsung Pay is being used by around five million people in the US and South Korea, with China being the next step in its global launch.
- Online retail market growth in the Asean nations remains slow, but nonetheless significant, according to a survey of consumer habits in the region.
In contrast to digital wallets, Ho described Samsung Pay and Apple Pay as “card aggregation” tools, where users link their credit card credentials to the smartphone and use the mobile device as a means of authentication for proximity, over-the-counter transactions.
“Comparing the target segments of card aggregators and mobile wallets is akin to comparing credit card and debit card users,” said Ho.
“The former will attract high-value transactions and incentivises use through embedded loyalty programs, while the latter will attract high-volume, P2P payments and – if this includes merchants – can incorporate loyalty partnerships as well.
“The system more likely to succeed is one that is most broadly accepted, is able to deliver more consistent user experience and is able to reward consumers for their consumption.
“This is perhaps why Samsung Pay is investing heavily into merchant onboarding, retail partnerships and consumer trial to create brand advocates across all tiers of the e-commerce spectrum. It is more than likely that Apple Pay will respond with a strategy of its own, but this remains to be seen,” he said.