Samsung banks on Samsung Pay as key telecom differentiator

Another eight devices are in the pipeline to be launched very soon

At a time when nearly 200 telephone handset brands have decimated the importance of hardware features, market leader Samsung is raising the pitch with its patented Samsung Pay service.

Having launched the payment service in late March with a handful of premium devices, it now plans to extend this to its affordable segment. It started the process on Wednesday with the launch of a new model, Samsung J Pro, with Samsung Pay. Sources say most of its coming models will offer the service.

"Samsung Pay is a patented application and is the new focus area for Samsung in India," a source said.

As hardware features seem to be increasingly taking a back seat when it comes to a buying decision, Samsung is considering its Pay service as a key differentiator, one that would enhance sale of its handsets. It has launched six new devices in 2017 and another eight are in the pipeline, including its flagship Galaxy Note 8.

"We will consider extending Samsung Pay to our future devices. Currently, we are studying the user patterns," said Sumit Walia, director of mobile business at Samsung India.

Samsung Pay works on a patented Magnetic Secure Transmission (MST) technology and is secured with Samsung Knox, a security application which allows users to make transaction through their debit or credit cards, without physically carrying these. As 98 per cent of the point of sale machines in the country are MST-enabled, the bet on Pay has rationale, says Walia.

According to Faisal Kawoosa, lead analyst at CyberMedia Research, utility services such as payment gateways and wallets are the latest features that consumers in the handset sector are considering as important. "However, third-party applications usually find better acceptance among Indian consumers, compared to proprietary solutions," he said.

To increase coverage of the service, the company has also come up with a Samsung Pay Mini for handsets which are not MST- enabled. However, users can only make payments through their Unified Payment Interface or Paytm accounts through this version.

Over recent quarters, Chinese companies have captured over half of the Indian smartphones market. Samsung remains the only non-Chinese entity in the list of top-five brands. However, between December 2015 and December 2016, it lost some share of the market, from 26.8 per cent to 25.1 per cent.