The race for mobile payments domination is heating up, with Android and Samsung due to enter the market in the coming months, along with Tesco, Sainsbury’s and Walmart all developing their own store payment systems.

What are mobile payments?

Mobile payment is a term used to describe the process of paying for goods in store using your mobile phone. The most common method uses the Near Field Communication (NFC) technology in your mobile phone to interact with an electronic contactless reader in store, authorising the store to take funds from an account linked to your phone. Depending on the particular system being used, this may prompt verification from the user on their phone, such as authorising payment by matching their fingerprint, entering a passcode or unlocking their device.

According to TfL statistics, mobile devices are already used for 35,000 journeys per day on its network. The usage of mobile payment methods is expected to skyrocket, with analysts predicting a 40-fold increase in the next 2 years.

(Note: Digital culture is changing the way retailers need to operate – Building the Digital Experience)

Android and Samsung are joining Apple in the mobile payment market

Apple is currently by far the largest player in the UK market, with Apple Pay having been in use in the UK since July 2015. It is also available in the US, Canada, Australia and China, with plans to expand to further countries this year.

Google’s payment system, Android Pay, is currently only available in the US. Previously slated for a UK release in March, its arrival is imminent, with Google stating it will be available ‘in the next few months’.

Samsung’s payment system is already active in South Korea, the US and China, with Samsung Pay schedule to be launched in the UK this year, as well as 6 other countries.

Tesco, Sainsbury’s and Walmart are also launching payment systems for use in their stores

However it’s not just mobile phone companies developing payment applications – several retailers are also keen to have their own payment method for use in their stores.

Tesco is launching PayQwiq into 500 of its stores in the London area, having successfully trialled in 50 stores. PayQwiq incorporates Clubcard, enabling the user to collect points without digging out their loyalty card and allows for spends of up to £400, much higher than the standard £30 limit for contactless payment.

Sainsbury’s SmartShop system is intended to help users more easily complete their ‘shopping mission’. Users can create a shopping list on the application, which will calculate their optimum route through the store. The users can then use their phone to scan products as they shop and use their mobile to pay at the checkout. This is initially being trialled in 2 stores as part of a wider initiative.

Walmart have developed their payment solution inside their existing app as this ranks within the top 3 retail apps. The system is being trialled, with the aim to rollout in the first half of 2016. Along with Tesco’s PayQwiq, Walmart’s application requires the user to scan a QR code at the checkout to pay, rather than through the NFC technology utilised by most other systems.

What’s in it for consumers and retailers?

For the consumer, this technology expands their payment options in store and increases the speed at checkout.

By developing their own payment method, retailers can avoid the costs associated with using Apple and Android’s systems, as well as being able to tailor their system to offer further benefits to the customer beyond payment alone. Furthermore, retailers are able to better keep precious data on consumer spending by associating it to a particular customer, information they may otherwise miss out on.

What’s next for mobile payments?

As well as the introduction of these new payment methods, we’re likely to see expansion into other consumer areas. One such example is flypay, an application allowing users to pay in restaurants and bars using their mobile phone.

Further developments could mean you’re soon able to pay without even taking your phone out of your pocket. Google is trialling its Hands Free payment system; after stating that you’d like to pay with Google, the application verifies your phone’s location is in the vicinity of the store and the cashier confirms you match a photo attached to your profile. But don’t throw away your wallet just yet – the system is currently only available in limited stores in San Francisco.

With so much going on, 2016 appears certain to see exciting developments in the mobile payment market.


Thomas Callicott, Consultant


Learn More:

Apple Pay

Apple pay launches in the UK

Apple Pay: Everything you need to know

Android Pay UK release date

Google rival to Apple Pay due in Britain next month

Samsung Pay UK release date leaks

Tesco takes on Apple with own mobile payment system

Sainsbury’s experiments with new supermarket design

Walmart launches its own mobile payment service after shunning Apply Pay

Hands Free Payments from Google

Google Hands-free payments app: What is it and how does it work?