Money 20/20 and more big numbers… Your Contactless Intelligence Weekly News Review

Money 20/20 and more big numbers…

It was Money 20/20 last week in Las Vegas and, if we know anything, it’s money talks. Although in this case, mobile payment people talk more. The numbers that were being thrown about ranged from mobile payment users, to transactions, to actual customers who could, potentially, be users of said systems. But whatever systems were being talked about - according to their respective companies, the future is very, very bright.

For starters, representatives of Samsung took to the stage to share a handful of updates about Samsung Pay, an offering that company reps have continually reminded us is “the most accepted mobile payment system.” And while Samsung is anything but shy on Samsung Pay’s coverage due to its MST and NFC capabilities, the company’s announcement did not reveal the actual figures needed to back it all up. What Samsung DID share was that U.S. consumers who are using Samsung Pay are using it repeatedly, reportedly to the tune of eight transactions per active user. Data also showed that three out of four Samsung Pay transactions were made via MST.

“After one month, the numbers say it all: Consumers who have used Samsung Pay are using it repeatedly because it works almost anywhere you can swipe or tap a card,” Thomas Ko, global co-general manager of Samsung Pay, said in a statement. “We’re thrilled to introduce new partners that will build on our early success, and move us even closer to a world in which your mobile phone is a true mobile wallet.”

Not to be outdone during their record-breaking fourth quarter announcement (OK, I admit it, making $53.4bn (£35bn) in the last 12 months is pretty impressive), Apple also announced that they will partner with American Express to bring Apple Pay to Spain, Australia and Canada, among others in a global expansion. Chief executive Tim Cook said the mobile payment platform would arrive in Australia and Canada before the end of 2015, with Hong Kong and Singapore following in the new year, joining the UK and US. “We are thrilled to announce today that we are partnering with American Express to bring Apple Pay to eligible customers in key global markets so even more people can experience the easy, secure and private way to pay,” he announced during the investors call. “Apple Pay will be available to eligible American Express customers in Canada and Australia this year and is expected to expand to Spain, Singapore and Hong Kong in 2016.”

Cook also said that 1m credit cards were activated for Apple Pay use within 72 hours of its availability in the US last year, making it the largest mobile payment system to date. “Apple Pay is seeing double-digit growth in transactions month after month, and we continue to add major businesses, including Starbucks, which will roll out Apple Pay support to all its U.S. stores in 2016. Apple Pay now supports merchant rewards programs. We also look forward to announcing several popular retailers coming online in the next few weeks,” added Cook.

The company was quick to point towards research from eDigitalResearch suggesting that Apple Pay users are more satisfied than other contactless payment users, with over a third of shoppers who owned an Apple device using the service. Said Cook, “We completed our fiscal year in September, and we are proud to report revenue of $234 billion, an increase of 28 percent and $51 billion over 2014. This is our largest absolute revenue growth ever. To put that in some perspective, our growth in one year was greater than the full year revenue of almost 90 percent of the companies in the Fortune 500.” Showoff…

Finally, not to be out done, Merchant Customer Exchange (MXC - remember them?) announced that it would be the premier partner for the newly unveiled mobile payments platform Chase Pay from JP Morgan Chase. Described as a “closed loop network,” Chase Pay will allow Chase’s 94m credit, debit and pre-paid card customers the ability to make in-store, in-app and online purchases, beginning in 2016.

Chase touts a number of advantages it has over some current mobile payment systems, noting that Chase consumers will be able to use the service on “virtually all” smartphones, and will be able to pay at places where other mobile payments don’t always work – like gas stations and drive-through windows, for example. Plus, in some locations, Chase says that consumers will be able to use their smartphone to take a picture of their receipt to pay. Chase brings to the table a large number of potential users, noting that one of every two U.S. households is a Chase customers. 

Thanks to Chase Pay’s MCX backing, the platform will be rolled out mid-2016 to merchants who represent over 100,000 retail locations across the U.S. The MCX consortium, backed by retailers like Walmart, Target, Best Buy and Shell, have stores in the big-box, convenience, pharmacy, fuel, grocery, quick- and full-service dining, specialty-retail and travel categories. The retailer support is something that the consortium hopes will allow Chase Pay to topple Apple Pay and others’ growing traction in the payments space.

That being said, there’s one huge drawback with regard to Chase Pay: unlike Apple Pay, Samsung Pay and Android Pay, which are NFC-based (tap-and-pay) solutions, Chase Pay uses QR codes. That means shoppers have to show the QR code to the cashier, who then scans it. I think we all know what we think to that.

Finally, as MCX is a pro-retailer solution, merchants do have the advantage of a network that includes no network or processing fees and no merchant fraud liability. But they’re also getting shoppers’ data – something that today’s more privacy-minded consumers are fighting back against. Especially when there is no guarantee as to how safe that data will be kept. Just ask Talk Talk… Or better still -  don’t.

Until next time,

Steve Atkins
Contactless Intelligence