On Monday PayPal came out swinging against Apple's new electronic wallet called Apple Pay. PayPal ran a full page ad in the New York Times that basically said that if Apple can't protect your Selfies, how will they ever be able to protect your finances? PayPal's PR man Rob Skinner explained why he's not running scared, as well as firing a good humored jibe about the truly dreadful live feed that Apple provided complete with timeouts, jumps and a Chinese translator. Skinner added that "Nobody can dispute Apple's strong track record, but payments is a difficult area," he said. "It's much more difficult to do payments than to keep a live stream working!" Our report takes a look at one of PayPal's next moves against Apple Pay.
According to a new Korean report published today, Samsung Electronics is trying to add simple payment functions to its smart watches. By the earliest, Samsung Electronics might reveal a simple payments-enabled smart watch at Mobile World Congress (MWC) 2015, the world's biggest mobile exhibition to be held early next year.
A high-ranking official at Samsung Electronics commented that "We are currently developing the smart watch equipped with fingerprint identification technology and relevant solutions through cooperation with PayPal, the world's most renowned financial transaction service company, as well as Synaptics, a global company specialized in biometric verification. By the earliest, the third generation smart watch to be released early next year will have this new system in which payment is authorized immediately when users identify themselves through biometric sensors such as a fingerprint or login."
The simple payment system provides users with promotional information of stores nearby based on the current location of users. Then users can choose products before actually entering the stores and make payments upon the receipt of the purchased products.
Transaction information and account balances can also be checked through text messages. Samsung Electronics plans to expand the service from 25 countries currently to over 50 countries worldwide. Since this service cannot be used in Korea, as the PayPal payment system has not been introduced yet, Samsung Electronics is considering bringing in a similar service internally.
Samsung Electronics' movement to install the simple payment function in its smart watch are analyzed to compete against Apple.
Apple's new Apple Watch due out in early 2015 will include a payment system using a skin contact sensor, not the fingerprint identification system to be utilized by Samsung. If users of the Apple Watch enter a PIN at their initial trial and the Apple Watch touches the skin afterwards, four lenses made of sapphire materials verify users, allowing them to log in and make payments.
At present, Synaptics is the leading and most active global company in the payment market through biometric verification such as fingerprints. Synaptics already established the "Fast Identity Online Alliance," an international industry consortium for biometric identification, and is leading it. Members include major financial institutions such as PayPal, Bank of America, Visa, Samsung Electronics, Microsoft, Google, and LG.
Through biometric identification applications jointly developed by member companies, global card companies including Visa and MasterCard and major financial institutions including PayPal and BOA are synchronized in one network.
While Samsung and PayPal are racing against time to match Apple Pay, a CNBC (re/code) report titled "Why Apple Pay Will Hurt PayPal" lays out why Apple may have a winning hand. They start off by stating that "In addition to allowing people to pay in stores, Apple Pay will also let owners of the newest iPhones buy things within participating apps by using the credit or debit card they have on file with iTunes or the App Store."
Last year Apple beat Samsung to market with Touch ID and Samsung raced to match it and failed to do so adequately. This year Apple is going to lead the way, again, with Apple Pay launching in October in the US. Apple has a vision and Samsung has a crippling copycat mentality, pretending to know what they're doing.
Apple has a strategic plan while Samsung goes for flash in the pan features like "Smart Scroll" which we revealed yesterday is being yanked by Samsung due to a technical defect. This copycat never learns. In the end, consumers with taste can always discern between class and crass, wise and wacky.