The mobile payments landscape has changed drastically over the past few months, with the announcement and subsequent release of Apple Pay. And it looks like 2015 may be even bigger.Re/Code's Jason Del Rey reported that Samsung, one of the biggest smartphone manufacturers in the world, was in talks with the Boston-based mobile wallet company LoopPay to power a Samsung mobile payments system. LoopPay uses a magnetic stripe emulator to mimic a credit or debit card swipe without actually swiping your card. The technology is different from Near-Field Communication (NFC) which Apple Pay and Google Wallet use, which could be why Samsung is interested in LoopPay.
But Samsung's response to Apple Pay looks pretty half-baked. First, it requires new, separate equipment, either a dongle or a new POS system. Second, past Samsung failures in ecosystem-building will hamper attempts to get critical mass: do you remember ChatON, which was supposed to compete with iMessage, but failed to take off and has been rumored to be closing? And third, it is much less elegant than Apple Pay, where Apple owns both the operating system and the hardware, so can deeply integrate the two.
The company should be focusing on in-app payments, where Apple is expecting the bulk of the transaction volume for Apple Pay to take place. When Apple Pay first launched, Apple SVP Eddy Cue told the Wall Street Journal that "he expects the biggest share of early Apple Pay transactions to be in-app purchases."
Here's the thing about in-store payments: using a credit card isn't that difficult right now. In fact, people have grown accustomed to using credit cards so much that new mobile wallet technologies have found it difficult to change user behavior. In theory, loyalty programs serve as an incentive for customer. Apple doesn't have a loyalty program yet, but media reports (by me) say that Apple is developing one.
Also, while mobile wallets are presumably safer than mag-stripe credit cards, the upcoming shift to EMV adoption solves a lot of fraud issues that have plagued companies like Home Depot and Target. Mobile wallet providers have said customers would use their products for the added security, however analysts and experts in financial technology agree that security isn't a good enough reason to drive adoption.
With most expecting transactions to move online, companies and smartphone manufacturers should be focusing on making both in-store payments faster and more secure, but also be focusing on e-commerce and in-app payments just as heavily.