Microsoft Corp. (NASDAQ: MSFT) stated that mobile phone users utilizing the Microsoft Wallet application can now pay at traditional retail stores by tapping their mobile handsets on terminals located at counters.
According to the tech giant in a blog post, the mentioned service will initially be available in the United States with Microsoft’s Lumia 650, 950, and 950 XL devices at over a million retail stores. The application, which is made available through the Windows Insider Program, will also store membership numbers and rewards so they could be viewed of scanned from the device. Through the Windows Insider Program, consumers can also preview upcoming features.
The tech corporation, which so far has not yet obtained foothold in the mobile payment industry, is the latest firm to unveil its so-called contactless service. This service allows consumers tap their mobile handsets on certain payment terminals in retail stores in order to complete purchase transactions. Apple Pay has been out since the second half of the year 2014. Meanwhile, Samsung Electronics Co. introduced its mobile payment service during the latter part of 2015. On Tuesday, Samsung has broadcasted that it will expand its service to Singapore, Spain, and Australia.
According to IDC Research Director Mr. James Wester, “Wallets have joined the list of devices and tools that consumers now expect on their smartphones like cameras, music players and GPS.” On the other hand, Juniper Research pointed out that global mobile and wearable contactless payments will edge higher to $95 billion annually by the year 2018, from less than $35 billion during the previous year.
The senior analyst at 451 Research Mr. Jordan McKee asserted that mobile-payment features can be advantageous for device manufacturers as the service will make consumers more loyal. Particularly for Microsoft Corporation, a payment feature could make the Windows platform more attractive for developers of applications.
However, according to the 451 Research analyst, the payment feature is still unlikely to alter the tech giant’s market position. Based on a survey conducted by 451 Research in the month of March, only 10 percent of smartphone users considered mobile payment features as an important factor when deciding what unit to buy. This survey also discovered that only 1 percent of potential smartphone buyers in the United States intended to buy a Microsoft device. This figure is lower compared to 3 percent in the month of December.
Mr. McKee stated that, “Given Microsoft’s position in the smartphone market, adding a mobile-payment capability is unlikely to sell more devices or increase market share.”
The Redmond, Washington-based tech corporation refused to give a comment on the matter.
According to the Chief Executive Officer of Crone Consulting LLC Mr. Richard Crone, if Microsoft Corporation becomes successful in closing its acquisition deal with LinkedIn Corporation, the tech firm could possibly utilize the new feature to expand into mobile person-to-person payments and other services.
“Retaining payment credentials in the cloud as a part of the customer profile opens up new service and revenue-generating opportunities for Microsoft,” Crone further stated.
As of 6:06 AM GMT -4 on June 22, the MSFT stock is changing hands at $51.19, up by 2.24 percent or 1.12.