Since two years, applications allowing the payment through the smartphone, are extending. Those applications can be offered by smartphones manufacturers (Apple Pay, Samsung Pay), by operating system developers (Android), by the retailers (AliPay from Alibaba, Walmart Pay), by app developers (WePay from the Chinese WeChat), by banks, telephone operators, etc.
The latest news is the introduction of Samsung Pay in Spain, this month, June 2016. That move allows Samsung to arrive in Europe before Apple, which is nevertheless already present in the UK.
The Apple vs. Samsung race
Spain is the 4th implementation place of Samsung Pay worldwide, after South Korea in August 2015, USA in September2015, and China. Samsung Pay is expected to be launched soon in the UK, where it will compete head-on with Apple.
On the other hand, Apple Pay is announced to be launched soon in France, as the first implementation of the American mobile payment system in the European continent. Apple Pay is already active in the USA since Sept. 2014, the UK, Australia, Canada, China, and Singapore since April 2016. On top of France, launching expected soon in Spain, Hong Kong, and Switzerland.
Spain has been chosen by Samsung, as its first Europe place of implementation for two main reasons :
- Second penetration rate of smartphones vs. total mobile phones, worldwide (88% of the cellular phones in Spain are smart).
- High rate of digitalisation of the banking sector.
Market studies done for Samsung show that 58% of Spaniards are interested to use systems of payment through the smartphone.
The first banking partner is La Caixa, one of the four biggest Spanish bank. That bank recently launched ImaginBank a mobile service, including ImaginPay, another app of payment through the smartphone. Samsung pay is offered as a complementary possibility, available for clients using certain models of Samsung devices.
Samsung expect the other main Spanish banks, Santander, BBVA, and Bankia to become partners soon. However, those banks have already develop their own app of money wallet.
From the retail side, some 200 Spanish actors already signed to be paid through Samsung Pay, like MediaMarkt, Starbucks, Spanish department stores El Corte Inglés, hypermarkets Mercadona and DIA and many other restaurants and point of sales.
How it works?
To use Samsung Pay, you will need some release of a Samsung Galaxy S6 or S7 device, or all new model the Korean brand will launch from now onwards. You will install the app on the handset, and scan the credit or debit card(s) you want to associate. Once the bank authorised it, you will be able to pay using your handset. Your spending will be charged to the associated card.
Samsung Pay operating is then close from the Apple one. However, the Apple service is not limited to smartphones (Iphone 5 and 6 versions), but can also work through an Apple watch linked to those phones, and with several iPad models (Pro, Air 2, Mini 3).
Like Apple Pay, Samsung Pay has no cost for the final user. In both cases, the app is free, and nothing is officially charged to the user on top of the bank commission. Difference seems to be that Samsung doesn’t ask the bank for a commission either, while Apple claims for a part of the benefit. It has been published that Apple earns 0,15% commission on every Apple Pay transaction in the USA. In the UK, fee has been fixed to 5 cents per operation. That policy from Apple seems to slow down the launching of the service in France, where the banking commission for payment by card are only 0,2%.
Although the software and the fact you use it is free, the device supporting it is very far to be costless. Let’s see what are the price of the smartphones supporting Samsung Pay and Apple Pay.
The average price of a Galaxy S6 (all versions) offered in the Spanish e-commerce is around 633 €, S7 is around 740 €, while Iphone 6 is closed to 850 €. IPhone SE (533 €) and IPhone 5 (387 € but less and less available) are a bit more affordable.
The price is quite similar in other Western Europe continental countries. As an example, average prices in Belgium are 645 € for the Galaxy S6, 740 for the S7, 819 regarding the Iphone 6. Iphone SE and Iphone 5 (already very few available in the BE market) cost respectively around 547 € and 382 €.
Please see below some data on the cited handsets in several Spanish etailers, and some point of comparison from France and Belgium.
Average price of an IPhone 5 in Spain
Average price of a Galaxy S 6 in Spain
Average price of the Galaxy S 6 in Belgium
Average Price of a Galaxy S 7 in Spain
Average price of an Iphone 6 in Spain
Price Comparison of Apple SE models in Spain
Price comparison of Apple SE models in France