One of the highlights of this week’s Cardware payments conference, hosted in Niagara Falls, Canada, was the Keynote presentation delivered by Will Graylin, Global Co-GM & CEO of Samsung Pay. The presentation was timely given the recent agreement between Apple and Canada’s major banks to roll out Apple Pay, and Graylin re-confirmed previous announcements that Samsung Pay will be available in Canada later this year. Android Pay will also, reportedly, launch this year, suggesting that we may finally start to see the needle move towards mobile payments adoption in Canada.
A key theme of this year’s Cardware was innovation and how the Canadian payments industry needs to adapt to take advantage of the burgeoning FinTech boom that is taking place in Canada, most notably in the Toronto region. Samsung Pay is a classic example of a major corporation accelerating its speed to market via the acquisition of a FinTech start-up as Graylin’s LoopPay was acquired by Samsung in 2015 and now operates as a wholly owned subsidiary.
Payments marketers need to shift from a “top-of- wallet” perspective to a “default card” perspective
Graylin outlined Samsung Pay’s vision to provide “frictionless omni-channel commerce” and an “All Purpose Anywhere Universal Wallet” with the key advantage over the other “pays” of being accepted in 90% of merchant locations globally by using its unique Magnetic Secure Transmission (MST) technology in addition to NFC and QR Codes. Graylin argued that Samsung Pay is the most secure payment method on the planet given that both Apple Pay and Android Pay are not universally accepted and therefore require consumers to revert to plastic cards for the majority of their transactions.
At Mintel Comperemedia, we view industry developments through the lens of marketing, and we have been talking about how important it is for payments marketers to shift from a “top-of-wallet” perspective to a “default card” perspective given the explosion in mobile payments, digital wallets, in-app and integrated billing. I addressed this in my own session at the conference called “Make Me Your Default.” Samsung Pay adds an additional layer of complexity to the default card marketing approach which payments marketers need to consider.
For Apple customers the goal of a payments marketer is to encourage consumers to load their cards into Apple’s Wallet, set specific cards as their default and encourage usage. Since Apple Pay’s launch in 2014 US issuers have developed campaigns to drive awareness, educate and incentivize customers to change their behavior, and similar default card marketing campaigns are now kicking off in Canada, most notably from BMO and Canadian Tire who both began emailing customers about Apple Pay on May 12 immediately following the Apple announcement, according to Mintel ePerformance/eDataSource.
For Android customers the options are not as simple given the choice between Android Pay and Samsung Pay which could lead to confusion. Rumors are circulating that Verizon, in the US, is no longer pre-loading Samsung Pay on its Samsung phones which means customers will have to take the extra step of downloading the Samsung Pay app should they prefer it to the pre-loaded Android Pay. Admittedly, consumers are used to replacing pre-loaded weather and GPS apps, but it remains to be seen whether they will be motivated to take that additional step for a payments app should the Canadian telcos take a similar approach. Even if Samsung Pay does come pre-loaded there is the question of deciding which app to choose from, and it will be down to marketers to make this easy for consumers so that they don’t just give up on the whole process.
Graylin stressed that Samsung Pay is not competing with the other “pays” but, instead, is competing with embedded consumer behavior; however, he was quick to point to the 4.7 rating for Samsung Pay vs. 3.9 for Android Pay based on reviews in the Google Play app store (both services have received more than 100,000 reviews), and the battle for the Android consumer is likely to intensify as both services become available in Canada later this year.
In the US, Apple and Google have been letting financial institutions take responsibility for most of the marketing but Samsung has taken a different approach by also emailing its customers directly. On June 9th and 10th, Samsung sent more than 2.5 million emails to customers with the subject line, “Make Friday your payday” and offering the first 777 Galaxy S7 customers who shop on Friday’s from 12-7pm using Samsung Pay an instant $10 gift card, according to Mintel ePerformance/eDataSource. Unfortunately the campaign has yet to resonate with a Read Rate of less than 10% compared to the 19% benchmark achieved for regular Samsung emails. Samsung clearly sees a need to supplement the activity of the banks with its own promotions; however, with read rates as high as 50% (Chase) or even 25% (PNC) for significant campaigns, it may be better to leave it to the banks.
One advantage of not being first is that Canadian marketers can observe how things develop in other countries and learn from their mistakes. Default card marketing is taking off in the US and is likely to take off in Canada. Marketers have a few months to develop their marketing plans but a blanket approach for all 3 “pays” is unlikely to provide the optimum ROI.
Andrew Davidson is SVP/Chief Insights Officer for Mintel Comperemedia. He is an expert in data-driven cross channel marketing intelligence, consumer behavior and global trends. As a thought leader and expert speaker, Andrew has consistently predicted the evolution of payments marketing for the past 23 years. He speaks at high profile industry events and has presented at conferences in the US, Canada, Australia, New Zealand, Hong Kong and Taiwan. Andrew is passionate about the global role of payments as the first step on the path to financial inclusion.
