The world has no shortage of “…” Pay services at the moment: Apple Pay, Android Pay, Samsung Pay, Walmart Pay, Kohl’s Pay, Chase Pay, Target Pay, CVS Pay, Amazon Pay and the ever-iconoclastic PayPal that 19 years ago made “Pay” its first name.
And it looks like the list will soon be getting just a bit longer. After months of speculation, it looks like South Korean electronics maker LG has decided that the mobile payments water is fine, so why not jump in.
The newest payments kid on the block will, according to LG, roll out in June alongside the U.S. launch of the brand’s newest flagship product — the LG G6 phone. The G6 has been for sale in South Korea since March 10th.
At this point, details about the service remain limited, and it seems that its initial availability will be quite limited.
Not exactly an ignition strategy made in heaven — and hardware-centric schemes are tough — but what could LG do with a mobile payments platform all its own?
The Early Stats On LG Pay
LG Pay comes to the market certainly a bit behind the payments plays made by other handset rivals Apple and Samsung, both of whose platforms are available in more than 10 countries and on more than one model of phone. And Google has the benefit of already being there, since Android Pay is already available on LG phones — ditto PayPal.
LG Pay, at launch, on the other hand, will only live on one type of phone — the flagship G6 model. And it is a costly flagship with a $796 sticker price. Granted, that is still considerably less than the $900 the iPhone 8 is expected to cost when it debuts later this year — but certainly not an inexpensive phone.
But the accessibility, at least for LG users, may be an issue that is short lived — the firm has already noted that it will open up LG Pay on other phone models via a software update sometime after launch, according to reporting in Engadget.
What is less clear is when, where or even if LG’s payments platform will be available outside of South Korea, since — as of yet — the company has made no announcement on the subject one way or the other.
What is known is that LG Pay will enable people to make payments using a technology that is surprisingly similar to Samsung Pay’s which enables a payment when a phone is held against any credit card reader capable of processing a magnetic stripe payment.
That technology comes care of Dynamics Inc, and it is unknown if it will be built into models other than the G6 going forward.
“We are pleased to partner with Dynamics, which has the most advanced technology and intellectual property in the field of mobile payments,” said Kim Hong-joo, Vice President of product planning at LG Electronics’ Mobile Communications Company. “In our effort to offer more benefits to consumers, we have designed LG Pay to meet the needs of our customers who want to be able to make purchases with their smartphones.”
Details remain light a few months out from the official roll out of LG Pay. But it is interesting to note that while LG is a player in the mobile phone market — and their new phone is well reviewed so far — LG is much better known for being one of the world’s largest electronics companies.
And they are an electronics company that has invested hard in designing and bringing to market a very wide range of smart devices: washing machines, dryers, dishwashers, refrigerators, vacuums, air conditioners — you name it, LG probably makes a smart version of it.
And with all those smart connected devices in the marketplace already, a payments platform custom-built to work within your devices’ ecosystem could come in handy.
Certainly it is something rivals over at Samsung have considered when they think about the future of Samsung Pay.
With 11 mobile payment services already on the market (including Kakao Pay, Naver Pay and Samsung Pay), South Korea is a market that also happens to be mobile and mobile payments friendly — and adoption and usage is growing but remains small. The Bank of Korea reported that in the second quarter of 2016, mobile payments rose by over 53 percent compared to the first quarter, and the daily average of mobile payments increased by 7.2 billion won from the previous quarter.
So, it’s no wonder that LG felt compelled to play along. But as we know and have seen in the 2.5 years that we’ve been tracking mobile payments adoption via hardware-based solutions used in physical stores, the adoption is slow and low. Making the app do more than pay is key, as is making it available to as many people as possible. The former is tough enough — without the latter, it can become a real challenge.
We’ll see how it all turns out.