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Samsung Pay swipes in gift cards for deeper retail integration

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December 11, 2015

Samsung Pay is raising the bar for competition

Samsung Pay is raising the bar for competition

Samsung Pay is rolling out a new gift card store enabling users to purchase digital cards from popular merchants within the application and furthering the solution’s goal of dethroning competition in the mobile payments space as holiday sales heat up.

Samsung Pay now supports 50 well-known retailer gift cards, thanks to partnerships with brands including Domino’s, GameStop and Toys R Us. As consumers double down on their holiday gifting efforts, the payment platform from Samsung Electronics is ensuring that its service remains top-of-mind for mobile shoppers seeking to buy last-minute gift cards for themselves, friends or family.

“All the data we have seen coming out of Black Friday and Cyber Monday suggest that mobile payments are taking off both in terms of volume and value of sales,” said Paul Berney, co-founder and managing partner of mCordis, San Francisco. “On top of that, we see the continuing success of Starbucks payment app and rise of Apple Pay.

“Everything that Samsung can do to broaden the appeal of its payment solution helps,” he said. “As there is no clear winner in the space, they are in a race to become the most accepted option.

“Ultimately, the winner will be one that consumers are most familiar with, most confident in (that it works) and provides the most convenience.”

Breaking into digital gifting
Samsung Pay is hoping to bring mobile commerce up a notch this season as it delves deeper into the lucrative sector of digital gift cards. While some shoppers may prefer to purchase gift cards directly in a retail store, a rising number of consumers are flocking toward more convenient options.

Users who store gift cards within mobile wallets or retailers’ apps no longer have to worry about misplacing or losing the card. The balance will be available to them at all times, meaning consumers can forgo carrying physical wallets or purses and use their smartphone as a primary shopping companion instead.

“Gift cards have become a very popular gift idea,” said Pat Dermody, president of Retale, Chicago. “They allow customers to purchase what they really want.

“Often the physical gift cards get lost or customers forget to carry them with them when they go to the store. What Samsung Pay has done will set it apart in the industry. Having all of your gift cards loaded on your phone, like you would for a mobile payment system, allows for more use cases out of the service.”

Samsung is gearing up to grab a slice of the lucrative mobile wallet sector with its own branded payment system for consumers, which launched in September in the United States and still faces stiff competition from a slew of other bigwigs (see story).

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Samsung Pay now enables users to purchase gift cards from a slew of top retailers

Samsung Pay enables customers to buy, store, share and pay with gift cards directly from a personal device. The mobile payments solution now supports 50 major merchants’ cards, ranging from eBay and Nike to Staples and GameStop.

Additional options are set to be added in later months.

Consumers may use these mobile gift cards in stores across the nation, or use the Samsung Pay app to buy select virtual gifts for themselves, family or friends. Individuals seeking last-minute holiday presents could be tempted to download the Samsung Pay app and begin using the payment platform if they have not yet already.

Users will likely appreciate having the ability to gift friends and family with the mobile cards. Often times, shoppers visit a bricks-and-mortar store and realize they do not have their gift cards with them as they are about to pay.

Samsung understands this conundrum, and is aiming to provide more flexibility and choice for shoppers who want to spend their available balances.

Easy payments
Samsung Pay is compatible with many of the United States’ major banks, and also counts partnerships with credit card brands such as American Express, Visa and MasterCard.

Users wanting to make a payment via Samsung Pay should swipe upward in the app and scan their fingerprint to verify the purchase. The platform taps tokenization and fingerprint authentication to ensure that all payments are conducted in a secure manner.

The mobile commerce service is also compatible with the majority of terminals, including most NFC, EMV and magnetic stripe.

Samsung’s digital gift card store is likely to prompt other mobile payment solutions to follow in its footsteps.

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Samsung Pay is making a splash in the mobile payments sector

A slew of other brands have dipped their toes into the digital gift card industry as well. In August, Dunkin’ Donuts dispersed mobile gift cards to winners of its latest social media sweepstakes and offered a coupon to app users ahead of back-to-school season (see story).

“It may persuade some existing Samsung phone owners to try payments if they haven’t already, but I doubt it is a reason to buy a handset,” mCordis’s Mr. Berney said. “Samsung needs to make mobile payments an everyday utility rather than a rarely-used novelty.

“You have to wonder if the audience who buys and uses gift cards is the same audience who buys high-end handsets and is an early adopter of mobile payments. If it is, then Samsung could be on to a winner. If not, then this is a nice-to-have rather than must-have [feature].”

Final Take
Alex Samuely, staff writer on Mobile Commerce Daily, New York

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Alex Samuely is staff writer on Mobile Commerce Daily, New York. Reach her at alex@mobilemarketer.com.

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