Samsung has teamed with SoFi to release a Samsung Pay debit card later this year. The announcement comes a year after Apple launched its credit card, and a month after Google announced its plan to issue checking accounts and debit cards.
Apple was the first to roll out its payment system, Apple Pay, in 2014, while Samsung followed with its own in 2015, and later Google officially merged several different apps in 2018 to form Google Pay.
USA Today posits that “By launching and expending financial services, tech companies gain access to more data about user’s spending habits. The services also help to extend brand loyalty and lock you more deeply into their existing business models.”
According to Google’s press release, benefits for consumers of their card include “useful insights and budgeting tools.” Both Google and Samsung say that their debit cards will link to their current smartphone apps, an added convenience for existing users.
The announcements signal a movement by large tech companies into the fin-tech world. “If we can help more people do more stuff in a digital way online, it’s good for the internet and good for us,” Google’s Caesar Sengupta told the Wall Street Journal last year.
A rise in digital payments is a motivating factor for these companies, with remote card payments growing by 20.5 percent between 2015 and 2018. But whether these cards will be successful, competing against banks and credit card companies, remains to be seen.
“I think all of these companies see the need for a smart digital twin to the dumb plastic,” Vaduvur Bharghavan, the CEO of Ondot Systems, which provides mobile phone-based technology to banks and credit unions told American Banker. “Some of these might succeed, and some of these might fail. But I don’t think this is a fad.”
The tech companies have yet to release details about their proposed cards. Still, questions remain about whether there are plans to eventually expand into peer-to-peer services, like Venmo, or what additional benefits cards could provide to consumers.
A likely outcome of tech companies moving into the consumer financial market is the widespread adoption of contactless payments. The linking of banking accounts with smartphones means that this practice could increase in popularity over time. With present health concerns, consumers may look to adopt those options if available.
Business Insider notes that although Samsung Pay is limited by the number of phones that can support the app, its service sees 36 percent more monthly engagement than Google or Apple’s platforms. Expanding on this could lead to greater access to financial tools for underbanked adults in the U.S.