Samsung users will be able to choose PayPal as their preferred method of payment in-app, online and in retail stores through the Samsung Pay mobile payments platform, the companies announced today. The strategic partnership will initially be available to Samsung Pay users in the United States before expanding to other countries, says Samsung.
The move to connect PayPal’s wallet with Samsung Pay will open up PayPal to millions of stores, Samsung and PayPal both noted. Its mobile payments technology, a rival to Apple Pay and Google’s Android Pay, works both with NFC point-of-sale system and those using traditional mag strip technology. Because Samsung Pay supports Magnetic Secure Transmission (MST) technology, it can replicate a card swipe – allowing Samsung Pay to work nearly anywhere that payment cards are accepted.
According to a Boston Retail Partners survey on mobile payments released earlier this year, Apple Pay now has the largest percentage of supporting U.S. merchants, with 36 percent accepting the technology, up from 16 percent the year before.
PayPal was a close second with 34 percent acceptance, followed by MasterCard PayPass (25%), Android Pay (24%), Visa Checkout (20%), Samsung Pay (18%), Chase Pay (11%) and private label mobile wallets with 4%. (The survey was based on a survey of what retailers say they accept).
To increase its adoption in-store, PayPal last year partnered with major stakeholders like Visa and MasterCard for store payments. And in April 2017, PayPal said it would work with Android Pay as well, to support both mobile payments in apps and those in brick-and-mortar retailers.
In addition, PayPal just last week announced an expanded relationship with Apple, which allowed the payments platform to be included as a payment option for App Store purchases that’s now accessible via Apple’s mobile devices, both in the U.S. and in 11 new markets. The news quickly sent PayPal’s stock soaring.
The Samsung Pay tie-up is another example of PayPal’s plan to increase adoption via partnerships and deals, rather than trying to out-compete its mobile payment rivals with an “us vs them” strategy.
For PayPal, getting a foothold in mobile is critical to the future of its business. As the company said today, it processed $102 billion in mobile payment volume and two billion mobile payment transactions last year.
“At Samsung, we pride ourselves on our open model of partnership and collaboration, which helps us deliver the best experiences to our customers,” said Injong Rhee, CTO and Head of R&D, Software and Services of the Mobile Communications Business, Samsung Electronics, in a statement. “We are excited to be partnering with PayPal, one of the largest payment platforms in the world, to offer our global consumers a richer mobile wallet experience,” Rhee added.
PayPal and Samsung already had a working partnership in place ahead of this new deal. For instance, PayPal and Samsung worked together on mobile payments back in 2014, and was added as a payment method in Samsung smart TVs the following year.
The PayPal integration will soon be live in the U.S. on Samsung smartphones, including devices like the Samsung Galaxy S8 and S8+. Samsung did not announce a timeframe as to when PayPal support in Samsung Pay would expand outside the U.S., only saying that it would also arrive “soon.”