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South Korea-based smartphone manufacturing giant Samsung Electronics on Tuesday launched its mobile payment service, known as Samsung Pay, in the Chinese mainland, joining the fierce competition in the promising mobile payment segment in the world's biggest smartphone market.
The move was jointly announced by Samsung and its Chinese partner, China UnionPay, the only interbank network in the nation, which links the ATMs of all banks throughout the mainland.
As a result of the move, 15 banks, including Industrial and Commercial Bank of China and China Construction Bank, can connect their credit or debit cards to Samsung Pay.
Other banks such as Bank of Communications and Industrial Bank will soon follow suit, according to a note Samsung sent to the Global Times on Tuesday.
Samsung Pay is supported by Samsung's Galaxy S7, Galaxy S7 edge, Galaxy S6 edge-plus and Galaxy Note5 models only on licensed Samsung mobile phones, the company said.
This official launch in the mainland comes after Samsung Pay's month-long public testing began on February 24.
The company launched its mobile payment service in South Korea and the US in 2015.
Samsung's march into China's mobile payment market follows moves by US smartphone giant Apple Inc and its Chinese rival Huawei Technologies Co.
Apple Pay became available in China from February 18 in partnership with 19 banks. Huawei announced on March 8 it would allow Bank of China's cardholders to use Huawei Pay.
Samsung Pay will have wider applications than its competitors, media reports said.
Samsung Pay can be used in almost all point-of-sale (POS) machines thanks to its support of both the wireless technology known as near-field communication (NFC) and magnetic secure transmission (MST), a technology that emits a magnetic signal that mimics the magnetic strip on a traditional payment card, according to Samsung.
Apple Pay and Huawei Pay can only be used on POS terminals that support NFC, tech.sina.com.cn reported on Tuesday.
Huawei told the Global Times on Tuesday that it sees NFC payment as a safer payment method that can't easily be duplicated as magnetic strip payments can. The company also said about 7 million POS machines in China now support NFC technology and the number is still rising.
"The large number of smartphone users in China and the convenience of mobile payments make China a hugely profitable market for companies like Samsung, Apple and Huawei," said Hao Zhujing, an industry analyst with EnfoDesk, a big data analysis consultancy unit of domestic information provider Analysys International.
As of 2015, 470 million smartphones were in use in China, surging from 121 million units in 2011, according to domestic tech website tmtpost.com.
And 358 million Chinese had paid for goods via their smartphones as of the end of 2015, up 64.5 percent year-on-year, according to a report issued by the China Internet Network Information Center on January 22.
"The huge potential in China's mobile payment market, not only in first-tier cities but also the underdeveloped second- and third-tier cities, is bound to attract more competitors," Hao told the Global Times on Tuesday. "But the mobile payment market still needs to be developed in aspects such as users' payment habits and partnerships with banks."
China's Internet giants have already moved into the market one step ahead of smartphone manufacturing giants.
Alipay, Alibaba Group Holding's online payment platform, currently has 450 million active users, Jing Xiandong, Ant Financial chief financial officer, was quoted as saying by the Qianjiang Evening News on March 4.
Tencent's WeChat has about 3.6 trillion yuan ($552.96 billion) in transaction volumes every year, sohu.com reported on Thursday.
"Alipay and WeChat have some advantages in mobile payment due to their huge user bases, but smartphone makers also have advantages since Apple Pay and Samsung Pay are more convenient in terms of payment procedures," Hao said.
Hao said that promotional efforts will ultimately determine the winner in the market.
