Mobile payment, which lets smartphone owners pay for everything from coffee to groceries via NFC (near field communication) exchange, is growing. The technology market intelligence firm TrendForce forecasted in February 2016 that mobile payments will reach $620 billion worldwide by the end of the year. This represents an astonishing 37.8 percent jump from 2015.
Here’s a rundown on the major payment systems on today’s market.
Smartphone-Driven Payment Systems
There are three major smartphone-driven payment systems: iPhone’s Apple Pay, Samsung Pay and Android Pay.
Apple Pay, introduced in October 2014, is the oldest system to work with a specific smartphone operating system (OS). Android released its system the following February, and Samsung introduced its own in September 2015 as it introduced the Galaxy 6, the first phone to integrate it. The latest Samsung smartphone, the Galaxy S7, offers top-of-the-line security and accessibility through magnetic secure transmission (MST).
Apple Pay currently dominates the market, with about 12 million users, Bloomberg reports, citing data from a Crone Consulting study. But this amounts to just six percent of iPhone users. In spite of its relative newness, Samsung isn’t far behind, with four percent of Galaxy owners using the system, including those with older phones who download the Samsung Pay app. Just one percent of Android owners use Android Pay. At this adoption rate, Samsung could lead the market by the end of 2016, Fast Company reports.
Which system is better? Apple certainly has the benefit of being most familiar to merchants and banks. Barron’s reports a recent Piper Jaffrey study of 500 merchants found that less than half (44 percent) use mobile payments or requested information for them; two-thirds asked about Apple Pay. In addition, all major banks and many regional ones accept Apple Pay, even those with their own mobile payment systems. Apple’s head start in the market gave it entry to hundreds of branded merchant and restaurant chains.
So why not go with Apple Pay? After initial rollout problems were fixed, the main problem is with iPhones: their batteries drain quickly, particularly compared to Samsung’s. No juice = no payment. Samsung Pay had a much smoother rollout here and in its home country South Korea, where CNet declared it “a hit,” handling $30 million in transactions on its first day. In addition, the MST technology it uses through its May 2015 acquisition of LoopPay, provides additional security, says Forbes.
Mobile Wallets Talk to Any Smartphone
Other mobile payments are conducted through mobile wallet apps that aren’t tied to a particular operating system. Here’s a rundown of the best-known options:
- Google Wallet has been around since 2011 but didn’t really find itself until 2015, says PC. It offers a mobile website that talks to Windows and other non-iOS, non-Android phones. It has the highest daily spending limit, $5,000 per day, which is twice the industry average. It also lets users send cash via secure text.
- Android Pay is built into Android devices and works via NFC. It includes some features that used to be in Google Wallet, like gift card and loyalty card management. It also works with bank apps and within store and brand apps.
- PayPal is a great choice for people who shop through the service; although, the number of merchants who accept it is limited thanks to Amazon. It works with Yelp’s Eat24, which interfaces with restaurants and food delivery.
- Square Cash operates through email, which gives some people pause. However, GoBankingRates.com notes it doesn’t collect bank account information and offers two-party verification. Like its parent company, Square, it’s extremely friendly to small businesses and easy for its customers to use.