Don’t look now, but there may be discontent between Google and one of its key Android partners: again. On Friday, the Wall Street Journal reported growing tensions between Samsung and Google.
It’s not the first time we’ve heard that the relationship is strained. So what’s the latest issue? Samsung’s purchase of LoopPay, which gives it a mobile payment platform of its own.
Although neither company would likely admit publicly to any friction, there’s plenty of reason to think it’s there.
Google was reportedly not happy when Samsung decided to use its own Tizen software to power smartwatches, for example. Samsung later added Android Wear options to the marketplace but pushed forward with its own Tizen phone in December to further break away from Google’s handset control. Surely Samsung wasn’t pleased when Google bought one of its partners in Motorola, even though the company put out canned statement supporting [company]Google[/company].
And now we have the LoopPay deal, giving Samsung its own mobile payment platform even though Google has Wallet available for Android partners.
I can see why Google might be upset, particularly since Samsung has no obligation to offer LoopPay to its peers in the Android device market, Google gets no payment data from LoopPay transactions, and because LoopPay already works with an estimated 90 percent of all card payment terminals. The product uses magnetic fields to send card data from a phone to replicate the information stored on the magnetic stripe of a credit or debit card.
Here’s the thing: I don’t blame Samsung in this case one bit.
Google itself could have bought LoopPay and made the technology available to all of its Android partners at any time in the past. Instead, it’s been working on Google Wallet for several years but from the outside looking in, and it has been an inconsistent effort that has faced several roadblocks: Lack of worldwide support, new terminals needed and carrier pushback along with competing carrier payment solutions, for example.
Put another way: Why shouldn’t Samsung be looking out for itself if Google’s own Wallet product isn’t widely adopted, isn’t well-known by the Android phone users and isn’t marketed well? If Google really wants to rally the troops with a common mobile payment system, it needs to evolve Wallet, something the Journal said it will do this year, possibly even paying carriers for Wallet to be prominently displayed on Android phones.
Regardless of Google’s plans to put Wallet back in the spotlight, there’s no guarantee that Samsung will be in a better position later this year. Spoofing the magnetic stripe of a credit or debit card will work for now, but how will Samsung handle the coming transition to smartchip or EMV payment cards in the U.S. later this year? It’s too early to say, but LoopPay has told my colleague Kevin Fitchard that it has already started talks with banks to firm up support and partnerships for EMV payments, for which it has a solution in mind.
As critical I can be towards Samsung for creating a dizzying array of confusing product lines combined with cramming too many features in devices, I have to give the company credit here. Samsung is watching [company]Apple[/company] erode its smartphone sales crown on the one hand, as it quickly gains Apple Pay adoption on the other.
Samsung can’t combat that with Google Wallet in its current state, so what’s the alternative to going it alone? Sure it could wait for Wallet to gain more traction but Google has had since the 2011 debut of Wallet for that happen. You can’t blame Samsung for trying to take the lead when Google has faltered in mobile payments.