By Saheli Roy Choudhury for Yahoo news
The world’s two largest smartphone makers muscled into Singapore’s already-crowded mobile payment space this week, but experts say it may take a while for them to see much enthusiasm from locals.Apple (AAPL) launched Apple Pay in the city-state on April 19 for American Express card holders, who can use it at selected outlets and through various apps on most Apple smartphones and some iPads.
Jennifer Bailey, the vice president of Apple Pay, said credit and debit cards from Singapore banks including DBS, UOB and Standard Chartered would work with Apple Play in the coming months. The service had previously been launched in the U.S., China, UK, Canada and Australia.
A day after Apple’s announcement, South Korean electronics giant Samsung (Korea Stock Exchange: 593-KR) said Singapore would be the first country in Southeast Asia to receive its mobile payment system, Samsung Pay. The company said the service would launch this quarter, without giving a specific date.
Once available, the city-state will join the likes of South Korea, the U.S. and China, where the service is already up and running. In February, Samsung said its mobile payment service had about 5 million registered users, prior to its launch in China in March.
Samsung said that a February survey had showed that interest in the service in Singapore was strong. Of the 400 responses the company received, it said 71 percent were positive.
Consumers can use Samsung Pay in most retail outlets that accept credit card payment, using the Galaxy Note 5, Galaxy S6 edge+, Galaxy S7 and S7 edge smartphones, said Samsung.
To prepare for the roll out, Samsung said it was providing training for cashiers at partnering retailers and merchants. The company will also allow users to beta-test the service prior to the launch.
Samsung has already confirmed its partnership with MasterCard and Visa, with American Express expected to join up later. Samsung will also partner major banks in Singapore, including DBS/POSB, OCBC Bank and Standard Chartered.
But even with Singapore’s phenomenal mobile penetration rate, analysts believe the uptake of both Apple and Samsung’s mobile payment services may be disappointing. Data from the Infocomm Development Authority of Singapore showed the city-state had a mobile phone penetration rate of 148.4 percent in 2015.
“I think that consumer adoption of both Apple Pay and Samsung Pay will be slower than expected in Singapore,” a researcher at Forrester, Zhi Ying Ng, told CNBC.
Ng said while the use of contactless card payments was increasing in Singapore, and consumers were becoming more comfortable with the technology, it would take time for them to realize the additional value that digital wallets brought in terms of simplicity, security and experience.
International Data Corporation’s (IDC) senior market analyst Michael Yeo told CNBC that while mobile payments were “absolutely huge in Asia” with the success of Alipay and WeChat wallet offerings in China, in Singapore, the technology had yet to take off.
“There are quite a few systems out there…but there isn’t one which has quite yet made big inroads into the payments scene,” said Yeo. This was largely “due to the siloed nature and incompatibilities between the various payment methods” in Singapore, he added.
Many banks and payment networks already have mobile payment apps, including MasterCard’s MasterPass, Standard Chartered Bank and SingTel’s Dash, DBS’s PayLah! and OCBC’s Pay Anyone.
Kiranjeet Kaur, a research manager at IDC, added that Apple had a slight advantage over Samsung because, of the Samsung phones shipped in 2015, only half supported Samsung Pay, while Apple shipped most iPhone 6 models that are Apple Pay-enabled.
Both Yeo and Kaur said the limitation Apple Pay faced in Singapore was that it is currently limited to American Express cardholders, but once the service was extended to other banks, Yeo said he expected to see Apple Pay take “close to 20 percent of payments that are made through NFC terminals in Singapore by the end of the year.”
NFC refers to near field communication, the technology that allows two devices, such as a smartphone and a payment terminal, to communicate by putting them near each other.
First appeared at Yahoo news