Apple Pay, Samsung Pay:
Does being first matter?

Sam-Apple CroppedConsulting firm First Annapolis recently posted a helpful, feature-for-feature chart comparing forthcoming Samsung Pay with Apple Pay. I won’t reproduce the entire chart here for two reasons. One is that you need only click here or on the image at right to view it on First Annapolis’s site. The other is that I have high regard for copyright laws and for the consequences of violating them.

In their classic Positioning: The Battle for Your Mind, Al Ries and Jack Trout argued that no position was stronger than being first. If you cherry-pick, it might look like a solid claim. Products like Coca-Cola and Scotchgard have held their primacy, and it is not unreasonable to include iPhone with them.

Upon announcing iPhone in January 2007, Apple set the smartphone standard that holds to this day. At the time, Google was poised to introduce the first Android smartphone. It was to have been a Blackberry-esque device with a small screen and solid keyboard. With one look at iPhone, Google quietly scrapped two years of development and returned to the drawing board, choosing being late over being eclipsed.

But the case for first-ness falls apart when you reverse-cherry pick. Consider IBM PCs, Jeep, and Prodigy, where being first helped pave the way for latecomers by softening a market toward a new product, and by bringing to light mistakes for latecomers to avoid. And, to wit, Android now commands more than 50% of the smartphone and tablet market despite its late arrival.

History may repeat itself with Apple Pay and Samsung Pay. Samsung is bringing to market a product that looks a lot like Apple Pay. Both platforms support credit, debit, and prepaid cards. Both rely on cloud-based payment credentials, support NFC technology, and neither stores credit card account numbers on the device.

That is not to say that there aren’t differences. Apple Pay triggers POS devices to receive payment tokens from Visa, whereas Samsung Pay retrieves cloud-based payment tokens and passes them to POS devices at the point of sale. Samsung portends greater convenience at the point of sale with magstrip reader compatibility, and allows for Private Label Credit Cards (PLCC). On the other hand, Apple Pay offers convenience in the form of automatically loading at the point of sale, whereas Samsung Pay customers must launch the app. Apple Pay allows for payment through the app, whereas Samsung Pay works only at the point of sale.

Early indicators are that Apple’s system may be the more secure, but whether security differences are subtle or great, or matter to consumers, remains to be seen. One difference that I predict will be largely moot—unless Americans step up plans to vacation in Seoul—is that, unlike Apple Pay, Samsung pay will work in South Korea.

Returning to first-ness, I suggest that both products qualify. First-ness per Ries and Trout has nothing to do with being first to launch, but with being first in consumer minds. Since Apple Pay is available only to Apple users, Samsung Pay can own the position of “First” among non-Apple users. Samsung may also enjoy a slight advantage in the form of a market that has had a year to adjust to the concept of payment-by-portable-device.

It should be noted, however, that we not dealing with an iOS-versus-Android situation, but with a single manufacturer of Android devices. Were we discussing not Samsung Pay but Android Pay, its chances of attaining better than 50 percent of the market as did Android itself would be far greater.

It goes without saying that Samsung and Apple each hope to pull converts from the other’s camp. Good luck to them. From what we know about each group’s commitment to its own platform and animosity toward the other, conversions happen but not en masse. Each brand will simply sing to its own choir. The relative merits of Apple and competing products will matter less at the point of sale and more when people sit down to argue about whose phone or tablet is better. As long as neither Apple nor Samsung goes to great lengths to alienate its respective piece of the market, both products will probably fare well.

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