Why are all big companies jumping into payment systems?

When you go around shopping these days, you would agree with me that everyone is talking about their payment systems?
Wouldnt you! [Read on for my detailed analysis on various payment systems ]


There has been a lot of traction in the mobile wallet & digital payment world.

While PayPal continues to take the biggest share of mobile wallets, a lot of companies have been putting efforts into getting their payment systems up and running, and hopefully, change consumer habits of opening their wallets and swiping their cards.

Apple pay has done well, both in marketing & adoption.

Big Brand following & deep pockets!

Samsung Pay has been my personal favorite and also offers backward compatibility with older payment devices where it simulates a card swipe. 

Then I came across Android Pay!

Google is already announced Google pay.

Walmart is pushing its customers to use Walmart Pay.
to an extent that they may not even support other digital payment wallets!!! What!

JP Morgan Chase is working on their payment system (they are not going to use NFC).

Amazon pay has already been doing well.

and the list keeps growing further and further!!!

So, what is the reason that everyone major company is launching a payment platform instead of using some of the established players in the market? I will try to dissect some of that here today for you.

Let's look at that!

Established players & some data points 

If you look at the Payment market there are actually no established players. While Apple has worked on including Apple pay in their strategy for some time, their payment system only works with Apple devices. This leaves a fair share of the market out of its coverage. 

"There are around 800 million Apple phones in the world among the total 6.8 billion phone devices in total. On the other hand, there are approx 2 billion Android devices in the world."

Now, let's talk about North America which is a much more mature market. 

"Android makes up for 55% of the devices, Apple makes for approx 44% and blackberry/windows phones etc make for the remaining 1.8%."

A strong reason for all big tech companies to invest in the payment system, but there lies a major divide in their market share.

Penetration of mobile as a shopping medium

It's not a news that mobile has emerged as a major medium for consumers to browse, explore, discover and shop products. 

"50% of the orders during the 2017 holiday period came in through the phone. this is the first time when the orders via mobile exceeded the desktop."

In the world of increased attention towards mobile as a medium, it's very natural that a good payment system is integrated with it.

This is the same reason, why apple, android, Google have all been investing in their payment systems.

By now, its very clear when Apple, Android, and Google will gush over their payment systems. they have a huge following of devices and an ecosystem to cater to. but, why are Samsung and Walmart jumping on the bandwagon?

let's see:

Samsung acquired a company call LoopPay in 2015 and then came out with service renamed as Samsung Pay. 

"The goal was to capture market share in the digital wallet ecosystem, which is estimated to be reaching a staggering $3000 billion dollars by 2022."

Today Samsung has only 6% share in united states but it's a huge cake, where they are looking for a sizable pie.

Differentied Checkout Experience

 The biggest reason for why every big brand is jumping into payments is two folds:

• Less dependency on a particular payment system
• drive better experience with their own payment system

Rather than trying to offer every payment option in the world, it works much better for Walmart, Amazon or the world to have their own payment method.

This will ensure that they have better control of the devices they procure, the systems they build, and the experiences they can offer within their ecosystems.

At a checkout terminal, Walmart pay lets you scan the Walmart pay barcode at the start of the items scanning ( on first item scan) which helps speed up the checkout process. the receipt comes to you in the app.

You may have seen a variant at Costco, where you swipe the card at the beginning instead of after scanning all items in.

Secondly, as these brands launch options like 'scan and go' and other models, mobile payments will continue to play a significant role.

Payment methods sit within the user profile on the website.

Since users are shopping anywhere and everywhere, a mobile wallet or a payment system works much better in unifying your shopping experience, across online or in store.

A simple comparison of different payment systems:

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Some Excellent reference reports to read on this topic:

1. Mobile Payments market report: https://www.alliedmarketresearch.com/mobile-payments-market
2. Holiday season review of 2017: http://www.adweek.com/digital/mobile-shopping-grew-during-the-2017-holiday-season-according-to-salesforce/
3. Digital wallet share in USA: https://www.statista.com/statistics/284108/consumer-awareness-of-digital-wallets-in-the-united-states/
4. Digital wallet projections review: https://globenewswire.com/news-release/2017/11/06/1174756/0/en/Mobile-Wallet-Market-Expected-to-Reach-3-142-17-Billion-by-2022-Globally-Zion-Market-Research.html