Samsung Pay's Profitless Model gets a 'Failing Grade' but it gives them Free Insight into Consumer Behavior
According to a new Korean report, Apple Pay competitor Samsung Pay reportedly had a net loss of $16.8 million (20.167 billion KRW) in its first year on the market. Analysts view this as being close to a 'failing grade' if viewed on its business performance alone.
Thus far, the report noted that "Samsung Pay has helped differentiate Galaxy Smartphones from other Android Smartphones and has secured growth that is continuous. Since starting the Samsung Pay service in August of last year, there has been a total of $500 million in accumulated payments and 5 million accumulated members until February. This indicates that Samsung Pay had contributed in selling at least 5 million Galaxy smartphones in South Korea and the U.S."
Technically that's a farfetched conclusion. It's just a new service that 5 million Galaxy owners took advantage of rather than a net gain of 5 million new Galaxy phone buyers who exclusively purchased a Samsung phone due to that service alone
The report further noted that "Currently Samsung Pay Corporation is not creating profits from any business models. Samsung electronics formally announced that it has no plans in imposing any commission on using Samsung Pay."
However, in exchange for its free service, Samsung is reportedly securing and analyzing data on consumers' behavior through Samsung Pay to better understand trends on purchases of every kind. The 'Big Data' will assist them with future marketing campaigns and R&D. Whether they're giving their customers an option to opt out of this kind of data sharing is unknown at this time.
Although Apple may ask for your permission, they too collect similar data on how services are used, like Apple Pay. Apple notes, in context with software and services including iCloud and Apple Pay that "We believe in telling you up front exactly what's going to happen to your personal information and asking for your permission before you share it with us."
Apple's CEO stated the following last June: "I’m speaking to you from Silicon Valley, where some of the most prominent and successful companies have built their businesses by lulling their customers into complacency about their personal information. They’re gobbling up everything they can learn about you and trying to monetize it. We think that’s wrong. And it’s not the kind of company that Apple wants to be. We don’t think you should ever have to trade it for a service you think is free but actually comes at a very high cost."
In the new season of Netflix's political series called 'House of Cards' there's a key theme of the story-line that touches on the incredible collection of data of citizens by private companies and political parties. The theme silently makes the case for Apple's stance on encryption very loudly.