Portland, Oregon: Microsoft Corp. said mobile-phone owners using the Microsoft Wallet app can now pay at brick-and-mortar retail stores by tapping their handsets on terminals at checkout counters.
The service will initially work in the US with Microsoft’s Lumia 950, 950 XL and 650 devices at more than a million retail locations, the company said on Tuesday in a blog posting. The app, made available through the Windows Insider Program, where consumers can preview upcoming features, will also store reward and membership numbers, so they could be scanned or viewed from the phone.
Microsoft, which so far has failed to gain traction in mobile payments, is the latest company to introduce so-called contactless service, which lets consumers tap their phones on stores’ payment terminals to complete purchases. Apple Pay has been available since the second half of 2014. Samsung Electronics Co. released its mobile payment service in late 2015 and on Tuesday announced the expansion to Spain, Singapore and Australia.
“Wallets have joined the list of devices and tools that consumers now expect on their smartphones like cameras, music players and GPS,” said James Wester, a research director at the consulting firm International Data Corporation (IDC). Global mobile and wearable contactless payments will reach $95 billion annually by 2018, from less than $35 billion last year, according to Juniper Research, another consultant.
Mobile-payment features have the potential to benefit device manufacturers by making consumers more loyal, said Jordan McKee, a senior analyst at 451 Research. For Microsoft in particular, a payment capability could make the Windows platform potentially more attractive for app developers.
Still, the feature is unlikely to change the company’s market position, McKee said. Only 10% of smartphone owners surveyed by 451 Research in March considered mobile-payment capabilities important when deciding which device to purchase. The same survey found that just 1% of prospective US smartphone buyers planned to purchase a Microsoft device, down from 3% in December.
“Given Microsoft’s position in the smartphone market, adding a mobile-payment capability is unlikely to sell more devices or increase market share,” McKee said.
Microsoft, based in Redmond, Washington, declined to comment.
If Microsoft is successful in closing its LinkedIn Corp. acquisition, the company could potentially use the new capability to expand into mobile person-to-person payments and other services, said Richard Crone, chief executive officer of payments researcher Crone Consulting Llc.
“Retaining payment credentials in the cloud as a part of the customer profile opens up new service and revenue-generating opportunities for Microsoft,” he said.