According to new analysis from IHS Markit, 3.4 billion smartphones will be ready for Apple Pay, Samsung Pay and Android Pay by the end of 2017, and the number is expected to increase to 5.3 billion by 2021.
IHS Markit estimates that by the end of the 2017, 11 percent of active smartphones globally will be compatible with Apple Pay; 61 percent with Android Pay; and three percent with Samsung Pay, which overlaps with Android Pay, as Android Pay is also available on Samsung smartphones. “To reach these smartphones, Apple, Samsung and Android must strategically expand mobile payments services and build partnerships with banks and financial institutions,” said Ruomeng Wang, Mobile & Telecoms Analyst at IHS Markit.
By the end of the first quarter of 2017, Apple had launched Apply Pay in 15 international markets; Samsung had rolled out Samsung Pay in 14 markets; and Android Pay was available in 10 markets. “Apple and Samsung are leading the global expansion of device-based mobile payments services, Wang continued. “Despite Apple Pay having a 10-month head start on Samsung Pay, Samsung has been catching up with Apple in terms of total available markets.”
Developing reward programs help mobile payments services gain user adoption. At CES 2017 in January, Samsung reported that the number of daily Samsung Pay users had doubled every week since the launch of Samsung Rewards in the U.S. In addition to offering ongoing loyalty programs, mobile payment services providers can launch short-term incentive-based promotions during festivals to recruit new customers and take advantage of busy shopping seasons.
“Adding entertainment elements into the reward programs, such as Android Christmas Cracker and Alipay’s Red Envelope – which emulates the Chinese tradition of sending money to family and friends during festivals – differentiates mobile payments services by creating unique user experiences,” said Wang. “Mobile payments services can use reward programs to engage retailers, banks and customers, adding co-branding value in terms of marketing spend and brand recognition.”
Apple and Google are working to make their mobile payments services the default payment method, tied to their own ecosystems and used across platforms. Currently there are 38 payments platforms and two million small businesses supporting Apple Pay on the web, which allows users to checkout online using an Apple device and Safari browser.
Apple Pay also is available at the App Store, and integrates with apps such as Uber, AirBnB, Lyft, Groupon, Instacart, OpenTable and Starbucks. Android Pay enables users to make payments in Google Play, in apps and on mobile web sites such as Domino’s, Dunkin Donuts and Etsy in the U.S., and subscribe to the Washington Post through Android Pay at a discount.
In South Korea, Samsung is working with local online shopping platforms to launch Samsung Pay Shopping. In March 2017, the company partnered with Visa Checkout to expand Samsung Pay’s reach outside South Korea. “Compared to Apple and Google, Samsung doesn’t have the same level of content, app platforms or web browsers designed to keep customers engaged. In order to tie customers to Samsung’s ecosystem, Samsung must actively expand Samsung Pay’s support for online retail,” Wang said.
