In the race to persuade smartphone users to start shopping with mobile wallets, Apple Inc. and Google are facing a stiff challenge from a newer contender: Samsung Electronics Co.

South Korea’s largest company, which is banking on its Pay service to be a differentiator in a stalling smartphone market, has  signed up 5 million users and processed more than $500 million in transactions since debuting in the U.S. in September. Based on estimates by mobile-payment researcher Crone Consulting LLC, Apple Pay has attracted 12 million monthly users globally since its October 2014 launch, while Google’s Android Pay has garnered 5 million people who use it monthly since becoming available September 2015.

Samsung’s LoopPay — a startup acquired by the company in 2015 to be the basis for its payment service — uses technology that mimics a magnetic-stripe card when a phone is used with a store’s physical-card reader. This lets retailers accept mobile payments using their existing check-out equipment. While Apple Pay only work in some merchants’ terminals, Samsung Pay works everywhere.

“It’s become a cult following,” Richard Crone, chief executive officer of Crone Consulting, said of Samsung Pay.

Google, Apple and Samsung are among the companies seeking to capture a piece of a market that Forrester Research Inc. estimates will top $142 billion by 2019. For all three tech companies, it’s a way to entice consumers to pick their devices — whether it’s an Android phone, iPhone or Galaxy. For Samsung, with its earnings sliding and shares battered, it’s a way to protect market share in smartphone sales to Apple. At the end of 2015, Samsung had 22% of the global market for smartphone shipments and Apple 16%, according to researcher Strategy Analytics.


Neither Apple nor Google, part of Alphabet Inc., have released actual user numbers. In January, Apple said usage growth rate in the second half of 2015 was 10 times higher than in the first half.

Despite Samsung’s good start, many U.S. retailers still cannot accept mobile payments — and many consumers’ phones cannot make them. (Samsung Pay only works on five of its latest Galaxy phones while Apple Pay works in stores on iPhone 6s, iPhone 6s Plus, iPhone 6, iPhone 6 Plus and the Apple Watch paired with an iPhone 5 or more recent models.) More importantly, some people just don’t see the advantage of a mobile wallet over plastic credit and debit cards. Only a tiny fraction of consumers who own devices capable of using mobile wallets actually use them, according to Crone.

“For widespread adoption, there’s got to be something in it for the consumer,” David Ritter, an analyst at Bloomberg Intelligence, said in an interview.

Yet as banks like JPMorgan Chase & Co. and retailers like Wal-Mart Stores Inc. roll out their own mobile wallets for in-store purchases this year, all mobile-payment services should see a lift, Crone said. Apple, Google and Samsung should see their user bases double in the next year, he said.

“They are all moving in the right direction, helping to educate and jump-start the market,” Crone said.


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