Technology

Samsung becomes latest firm to launch mobile wallet in China

Samsung Pay Image copyright Getty Images
Image caption Samsung Pay works with more types of payment terminals than rival services from Apple and Google, the company says

Samsung has officially launched its mobile wallet service in China, in co-operation with local vendor UnionPay.

Instead of using cards, the service allows shoppers to use their smartphones to pay for in-store purchases.

Last month, Apple launched its own Apple Pay system in China, also in partnership with UnionPay.

China's smartphone market, the largest in the world, presents a huge business opportunity for mobile-payment systems.

Samsung Pay and Apple Pay will now compete with Alibaba's Alipay, which currently dominates China's electronic payments market.

However analysts told the BBC that mobile payment services provided by Alipay and WeChat were so dominant in China that international newcomers such as Apple and Samsung would face "an uphill battle" to win market share.

Tencent's WeChat also has a payment system which is popular in China, and telecommunications giant Huawei launched its own service earlier this month.

Read more: Samsung Pay and how it works

Image copyright Samsung
Image caption Samsung Pay can be activated without having to first wake up the phone's screen

The South Korean electronics giant said Samsung Pay was now available in China on a range of smartphones including the Samsung Galaxy S7, Galaxy S7 edge, Galaxy S6 edge+ and Galaxy Note5.

The firm said it would have "the opportunity to support additional mid-range models in the future".

In announcing its official launch, which has been expected since late last year, Samsung said that Samsung Pay currently supports select credit and debit cards of nine major banks in China including China CITIC Bank, China Construction Bank and China Everbright Bank.

Samsung has previously said it has one critical fact that will work in its favour: its technology works with a much larger number of existing payment terminals.

Uphill battle ahead?

There has been a rapid take-up of smartphones in China, with an estimated 68% of the population now owning one. And digital wallets are becoming a more popular way to pay for goods and services.

Samsung said on Tuesday that its payment system was "simple, safe and easy to use" and that it worked "virtually anywhere you can swipe or tap your card in China".

Image copyright Getty Images
Image caption By 2017, it is estimated the global mobile payments market will be worth some $1tn (£650bn)

Unlike Google Wallet and several other earlier payment apps, Samsung says there is no need to unlock its phones to launch a special app to get started.

Like Apple Pay, Samsung Pay will use near field communication technology (NFC), which needs a separate transaction device, but it will also support magnetic secure transmission technology which works on regular credit card machines.

However, Bryan Ma of IDC research firm told the BBC that Samsung would face the same challenges that Apple does in China.

"The use of Alipay and WeChat are so dominant in China that it's an uphill battle for both phone vendors, aside from some higher-end users in larger cities," he said.

"Making it worse for Samsung is it doesn't have the cachet that Apple does. And Samsung was number six in China's smartphone market in the fourth quarter of last year, with only 7% share, versus Apple at number two with 15% share," he added.

Samsung Pay is currently available in South Korea and the US. It is expected to become available in the UK this year.

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