Did you know that some businesses can influence or force their rivals in the industry to enact changes to their services, for instance? This is precisely what happened to Apple and Samsung when the former was able to “force” the latter to make drastic changes to the policies of the latter’s Samsung Pay. Keep on reading for the details of this news.
Launched in August 2015, Samsung Pay is Samsung’s mobile payment and digital wallet service that allows users to make payments using phones and other devices from the company compatible with this service.
Furthermore, over the years, Samsung Pay has also partnered with several banks and card providers across the globe to bring more manageable mobile payments to its consumers.
Samsung Pay was a leading service of this kind in South Korea until Apple Pay challenged the former’s presence. Now, Apple Pay is seemingly forcing Samsung Pay to change its strategies, particularly in changing fees from banks and card issuing companies.
Apple Pay forcing Samsung Pay to make changes to the latter’s policies
Earlier this year, Apple Pay was launched in South Korea, Samsung’s headquarters, in partnership with Hyundai Card, Hyundai Motor Group’s credit card service unit.
Since then, Apple Pay has competed not only with Samsung Pay but also with other leading services of this type in the country, such as Kakao Pay and Naver Pay.
This presence of Apple Pay in the country appears to be forcing one of its rivals, Samsung Pay, to enact significant changes to its strategies.
Samsung never charged banks and card issuing companies when making their cards compatible with Samsung Pay until Apple began charging financial institutions for compatibility with its Apple Pay.
News outlets said Samsung Pay would charge credit card companies a fee of 0.15 percent pay payment. Following this, credit card companies would, therefore, pay a total of around $53.5 million in fees yearly, the news outlets added.
However, even though Samsung Pay has started changing fees from financial institutions, they, fortunately, are still able to implement some control.
But Samsung Pay offers a return to credit card issuers
But here’s some good news. According to a report on the Korean news outlet Pulse News, Samsung is presently working on a marketing strategy that returns a portion of the fees it has charged card companies in exchange for marketing assistance. However, the amount can vary depending on the card payments.
This strategy is somewhat similar to the marketing support that leading payment networks like Visa and Mastercard offer their partners for using their services.
Moreover, the fee rates are still yet to be finalized, but sources in the industry projected that Samsung would follow a variable pricing method that charges reduced fees depending on factors that include the market share of a particular credit card issuer or the volume of card payments made.
