Apple Rumors Aside, Watch for Samsung M-Commerce; Google Wallet 2.0

As bloggers and analysts speculate ad nauseum about Apple’s possible NFC mobile-payment plans, they have been missing signs that another big handset maker is gearing up to enable NFC payment from its phones.

Samsung Electronics, which recently dethroned Nokia as the No. 1 phone maker worldwide and which probably sold more smartphones than Apple during the first quarter, definitely has its eye on using embedded secure chips in its future NFC phones.

Both Samsung and Netherlands-based chip maker NXP Semiconductors have confirmed over the past few days that Samsung is putting an embedded chip in its next flagship phone, the Galaxy S III. Samsung could own this chip in certain markets.

That is a change from the NFC chip Samsung included in its popular Galaxy S II, which can only support secure NFC applications in SIM cards. Samsung included the NFC chip in the Galaxy S II only when ordered by telcos.

It appears Samsung will include the embedded secure element in all Galaxy S III units, since the chip comes stacked as part of NXP’s PN65N NFC chip Samsung ordered for the model.

Moreover, a Samsung source told NFC Times the handset maker plans to embed secure elements in all of its NFC phones. The handset maker hasn’t officially confirmed that yet, however.

Unlike the constant stream of rumors about Apple–stoked again recently by news of yet another NFC-related patent that Apple might never act on–Samsung is making concrete moves toward taking a greater role in the mobile-commerce ecosystem.

The handset maker continues to expand its Seoul-based m-commerce unit under Victor Kim, a former director of mobile payment for Visa Inc. in Asia-Pacific. One recent staff addition to the team has experience with Samsung Group’s U.S.-based trusted service management unit, SK C&C, although the m-commerce unit might hire another TSM.

As NFC Times reported in March, Samsung plans to introduce both proximity and online payment and enable other payments service providers to do the same.

Among the offers could be a prepaid card that Samsung could issue itself or allow others to issue, including some smaller mobile operators. The payment service could be part of a Samsung mobile wallet. These payment applications would probably support the established payment schemes, Visa and MasterCard.

This is not to say that Samsung will no longer work with mobile operators to sell more NFC phones. It continues to see catering to telcos as key to its growth strategy.

If operators order phones with NFC chips supporting the single-wire protocol standard and SIM-based applications, Samsung is expected to provide them, including in the Galaxy S III. It could deactivate the embedded chip, a likely scenario in the U.S., where carriers call the shots.

Samsung is expected to target markets where telcos don’t control the distribution channels or phone features.

Meanwhile, all we have to go on for Apple’s m-commerce plans are more NFC-related patent applications or awards, including one recently for an “iWallet.”

It remains to be seen whether Apple acts on the patents in its next iPhone and puts an NFC chip inside. All that depends on whether Apple believes NFC technology and the contactless infrastructure are mature enough.

Apple, of course, would be the ultimate OTT, or over-the-top, player if it jumped into the mobile-payments market, and that prospect continues to haunt mobile operators and banks.

Google Wallet 2.0
Telcos and banks have already had to deal with Google and its wallet, which the Web giant launched last September, meeting resistance from operators, merchants and some financial institutions.

The result has been a disappointing debut for Google’s much-touted NFC service.

Now Google Wallet chief Osama Bedier is working on a Google Wallet 2.0 strategy that will make use of the company’s acquisition of New York-based TxVia, announced early last month, NFC Times has learned. 

TxVia provides a payments platform for processing a range of prepaid cards, including general purpose and gift cards, as well as payroll and government disbursement cards. 

Details are sketchy, but I’m told by a couple of sources that Bedier, who hails from online payments company PayPal, wants to move the Google Wallet more toward the PayPal concept of mobile payments at the physical point-of-sale. That would be a more of a cloud-based approach, while keeping an NFC component for the wallet.

It’s noteworthy that former TxVia CEO Anil Aggarwal has assumed the post of global head of payments business development at Google.

Bedier, however, did not reveal many details in his recent announcement of the TxVia acquisition, though he did note that TxVia, which Google has been working with over the past year, has connections with the major payment networks. As such, it could move Google to its “full Google Wallet vision,” he said.

It remains to be seen just how Bedier and Google plan to restructure the wallet, but the strategy sessions have been going on for some time. I expect to hear more at the Google I/O developers conference at the end of June.

And as Samsung’s brand blossoms in the minds of consumers, the handset maker could, in a sense, become another OTT player if it moves forward strongly with its own m-commerce strategy. 

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