LG to Jump into Mobile Payments with All-in-One Card
LG Pay – the promised new entrant into the mobile payments space – has had the industry on hold for almost a year. LG would join gSamsung and Apple as handset manufacturers getting into phone-based payments.
With a new banking partner in Korea, and a reported launch date in September, is LG Pay ripe to trump the existing players, like Android Pay or Samsung Pay?
LG Corporation, a Seoul-based conglomerate, is betting on the integrated circuit chip system to do the trick. Reports suggest that the company is working on LG White Card, a universal card that will link customers’ debit and credit cards into a single package. The card will adopt the IC chip technology, and will feature an LCD display.
The manufacturer first announced LG Pay in October 2015, with an initial launch date planned for Mobile World Congress 2016 in February. The launch was delayed, with no official company statement. After a brief downtime, LG announced last week that it had partnered with Korean KB Bank to further the development of its White Card.
The idea of the “one card to rule them all” isn’t new, with companies like Coin and Plastc already adopting a similar technology. That space hasn’t taken off “in a big way,” Rob Fernandes, a UK-based payments expert, told Bank Innovation.
Either way, LG success/competitive threat can only be linked to the market share of their mobiles, so in theory not major competition, actually very limited in most countries.The reality is that Android handset manufacturers have determined that NFC payment onboard the phone is now table-stakes to compete with Apple, so they’ll all do it, whatever their market share. Since it’s riding Visa/MC it doesn’t matter how small the share is, they’re just another manufacturer building a feature just as Samsung and LG both manufacture Blu-Ray players. I don’t think anyone besides Apple, Samsung and Google and a few others seriously believes they can drive critical mass as a wallet independent of the card schemes.
To put the volume in perspective, in 2015 LG reportedly sold 59.7 million smartphones, compared to 319.7 million figure for Samsung.
So maybe being dependent to a “card scheme” is the winning strategy. With retail giants like Walmart, the mobile wallet space seems too crowded for new entrants, while the adoption of the technology is still negligible, according Madeline Aufseeser, chief executive at Tender Armor LLC, which offers fraud protection tools for card-not-present transactions. Here’s what she told Bank Innovation previously:
Mobile wallets, while they made a splash on the scene, will not be replacing any significant portion of card transactions. The amount of adoptions is still pretty negligible. That is definitely the future, but just like with cash and checks, mobile wallets will not eclipse the use of cards.
LG Pay will first be available in Korea, but the U.S. is next in line. However, the exact timeline of the release and details on LG Pay features remain unclear for now.
