Samsung is closing the gap on Apple and Apple Card by launching Samsung Money by SoFi, a Samsung branded debit card linked to a mobile-centric cash management account, according to a new Strategy Analytics report, “Can Samsung’s Brand Stretch To Financial Services?”
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Covid-19 Shift to Mobile Financial Markets (Graphic: Business Wire)
By joining Apple as the only two smartphone makers offering branded financial services in the US, Samsung Money by Sofi delivers another point of differentiation vis-à-vis competing Android makers. Importantly, Strategy Analytics expects that encouraging Samsung Galaxy owners to adopt and use Samsung Money will improve customer loyalty and retention in an increasingly saturated US smartphone market.
Nitesh Patel, Director, Strategy Analytics noted “Building on Samsung Pay by launching Samsung Money makes sense, as it aims to boost engagement and loyalty in a fiercely competitive US smartphone and consumer electronics market. It also provides a platform on which Samsung can offer more financial services. However, while Samsung Pay is a mobile wallet which allows consumers to store and use existing payment credentials via their smartphone to make payments, questions remain over whether Samsung’s brand will stretch to other financial services, including money management accounts and potentially other services like credit and insurance.”
As highlighted in Exhibit 1, Samsung Money’s launch comes as the COVID-19 pandemic helps to accelerate the consumer adoption of digital and mobile financial services, consumers across all ages and demographics look to lower the risk of infection transmission where possible.
Evaluating which brands different customer segments trust to provide financial services and financial products is critical to understand for companies (e.g. device makers and service providers) planning to launch these types of services. Furthermore, understanding consumer preference for different products, combination of products and also user experience can optimize results.
David Kerr, Vice President, Strategy Analytics stated “Our consumer research confirms that Samsung has correctly identified improved financial management as a message that will resonate with some segments of mobile phone owners in the US. Our research also shows clearly that Samsung desperately needs to improve its position in the Hispanic market and the Gen Z segment in the US. Samsung’s focus on financial management may help to shore-up these user segments but will it appeal to the 45+ age groups where Samsung has most of its customers?
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