6 hurdles to Samsung Pay's success

Published
  • October 28 2016, 10:00am EDT
Samsung Pay is steadily spreading across the globe and adding new features, but it's also facing some strong challenges in these markets. Here are a few of the biggest issues Samsung's mobile wallet has faced since launch.

Samsung Pay is steadily spreading across the globe and adding new features, but it's also facing some strong challenges in these markets. Here are a few of the biggest issues Samsung's mobile wallet has faced since launch.

Note 7 recall

Perhaps the biggest issue for Samsung Pay is the loss of momentum it faces in recalling its current flagship handset, the Note 7, due to dangerous battery failures. In addition to the hits it took to brand image and customer loyalty, the recall cost the company more than $5 billion.

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Google launches the Pixel phone

As Samsung began pulling its Note 7 handsets off the market, Google came out with its own alternative, the Pixel. This handset, which supports Android Pay but not Samsung Pay, sold out ahead of its launch despite a much higher price tag than what Google's flagship handsets have previously carried.

Culture clash

South Korea is a fairly unique market for mobile payments. Samsung describes the market as being more welcoming to experimentation; it's a safe testbed for new features, but it also means the rest of the world's Samsung Pay wallets will be two to five years behind Korea's version.

Winning over banks

One of Samsung Pay's earliest issues was its launch schedule — it set a launch date before it had a single bank contract signed. Samsung delayed its wallet's launch slightly to bring banks on board, thanks to the influence of ex-bankers on its staff, but it was still at a disadvantage to its rival Apple Pay which had a much longer list of supporters when it debuted.

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Inconsistent experience

Samsung pushed hard to get consumers on board with its mobile wallet, offering incentives of up to $100 to new users. But one of those incentives excluded Bank of America debit cards due to the bank's initial inability to share transaction history with Samsung due to a technical glitch.

Crowded market

The banks that are adding Samsung Pay aren't doing so exclusively. This may be good for the overall mobile wallet market but — when issuers aren't promoting one wallet over another — it challenges Samsung to make the case that consumers should choose it instead of the more common Android Pay.