Reports: LG Electronics Next to Enter M-Payments Fray? (Oct. 21, 2015)
LG Electronics may be next to join the growing parade of mobile payments providers, and the biggest clue is the South Korean handset maker’s recent move to file a U.S. trademark application for “LG Pay.” Samsung Electronics pursued a similar strategy when it filed a trademark application for Samsung Pay a month before its m-payments service launched. LG’s trademark papers included seven possible names for a mobile payments wallet including “L-Pay” and “G Pay,” according to reports.
LG, which is preparing to launch a new handset, the LG G5, recently tested mobile payments technology and has explored the market for m-payments, various reports suggest. LG has the same opportunity as other handset makers to leverage NFC technology to enable contactless payments, but it’s less clear what business model LG would use to get its m-payments service off the ground. Unlike Apple Pay and Android Pay, which require direct participation from card issuers, Samsung took the novel approach of buying the patented magnetic secure transmission technology from LoopPay, enabling contactless payments at any electronic payments terminal. LG could not be reached for comment.
The buzz about LG’s possible entrance into the m-payments fray is a sign of the industry’s growth potential, says Guy Berg, a senior managing consultant with MasterCard Advisors. “Mobile payments is still in a very early development stage and we can expect the market and services to evolve rapidly over the next two to three years,” he tells Paybefore. Most handset makers are not likely to play a significant role m-payments business models over the long term, Berg believes. “But in the first three years [of development], handset makers will play a significant role in encouraging m-payments adoption,” he adds. Card issuers also may face challenges in supporting multiple m-payments services, which could mean anything from leveraging existing services to implementing new, internal support infrastructure, says Berg.
Separately, Microsoft Corp. is readying a mobile payments solution for its Windows 10 operating system, according to a report today in the Netherlands-based newsletter The Paypers. Windows 10 already supports a mobile wallet to store payment and loyalty card data, but so far it has not rolled out an m-payments service.
The m-payments industry likely will see more entrants, predicts Tom Zalewski, a former CorFire executive who is president of Dallas-based Aikon Consulting. “There will likely be four to five dominating players providing mobile payments services and to have a sustainable service will require key partnerships, economies of scale and reach—meaning customized regional offerings.”