Samsung Pay is still a relatively new mobile payment system and the service has only been operating for less than a year. However, the service has caused a loss of $16.8 million for the company despite its rapid global expansion.
In February 2015, Samsung purchased the company LoopPay for $229 million. This service was later relaunched as Samsung Pay last August. Samsung sees its mobile payment system as an investment for the company's future and as a compelling factor for consumers to buy its Galaxy line of smartphones.
As of now, the Galaxy S7, S7 Edge, S6, S6 Edge, Note 5 and a few Galaxy A smartphones support Samsung Pay. Users of these devices pay no extra cost to use the mobile payment system and the company does not plan on charging them in an attempt to increase the service's profits anytime soon.
Apple Pay is Samsung Pay's biggest competitor and both mobile payment systems have advantages over the other. Samsung has quickly amassed support for debit and credit cards from over 70 financial institutions in the United States.
Currently Samsung Pay works with around 70 per cent of the debit and credit cards available in America. However, Apple Pay supports a much wider range of cards and has a list of over 1,000 accepted banks in the US. Due to its support for magnetic stripe emulation, Samsung Pay is more widely accepted because it is compatible with a greater number of credit card terminals.
Apple Pay may dominate within the US but Samsung Pay has increased its user base in Asia by a great deal in its first year. The service has just launched in China where there is greater support and acceptance of mobile payment systems. Samsung also has plans to launch in Australia, Brazil, Singapore, Spain and the UK by the end of 2016.
While Samsung has certainly taken a loss launching its own mobile payment system, Samsung Pay has managed to carve out its own place in a budding market.