Samsung and Visa recently forged a global agreement that is expected to further the growth of mobile payments.
At the Mobile World Congress 2013, the two companies announced the agreement which allows Samsung devices with near-field communication capabilities to securely download mobile payments using the Visa Mobile Provisioning Service. In addition, the two companies also agreed that future releases of Samsung mobile devices with near field communication (NFC) capability will come loaded with the Visa payWave mobile payment applet for contactless transactions.
Visa said this agreement is particularly helpful to markets where mobile payments using smartphones have become commonplace.
What makes this partnership more significant is the focus on NFC-enabled devices, which is expected to number up to almost two billion by 2017, according ABI Research.
The two global companies said their alliance is the first of its kind between an NFC handset manufacturer and a payment network, "paving the way for the implementation of large-scale mobile payment programmes." Part of the companies' global alliance is to also work with financial institutions to accelerate the availability of mobile payment solutions worldwide.
"Samsung has been a pioneer in NFC devices and is again leading the way in enabling NFC-based mobile payments. The partnership with Visa represents a step towards a global mobile payment platform," said Dr Won-Pyo Hong, president and Head, Media Solution Center, Samsung Electronics. "We believe that we have a strong value proposition for financial institutions that will ultimately allow consumer choice in NFC payments."
An analyst said the Visa-Samsung agreement is a welcome boost to the acceptance of NFC given the market position of the two companies.
Eden Zoller, consumer analyst, Ovum, said Visa is a trusted payment brand. Samsung, on the other hand, is a top smartphone manufacturer in terms of shipments and a "driving force" behind the Android operating system.
"Both Samsung and Visa are committed to NFC and we would expect them to put effort and marketing muscle behind making consumers aware of the potential benefits that NFC payments can bring. This is desperately needed as for most consumers, mobile payments - let alone NFC - is simply not on their radar," added Zoller.
According to Ovum's latest Consumer Insights survey, mobile commerce and related applications are not the most common apps that consumers frequently use. Instead, mobile games, email, and social networking are on top of their list.
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