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Samsung to launch US debit card and cash management account with SoFi

May 12, 2020 / Nilesh Kumbharkar
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  • Samsung is teaming up with SoFi to launch a Samsung Pay debit card.

  • For Samsung, launching a debit card could be a tool that extends its reach to more customers to maintain its strong positioning in the mobile wallet space.

  • The announcement fuels the notion that credit and debit cards are set to be the next frontier of the mobile wallet war.


The major mobile wallet announced in a company blog that it plans to partner with student loan-based fintech SoFi on an "innovative" debit card accompanied by a cash management account. The card is set to debut this summer — timed with the wallet's fifth anniversary — with more details coming in "weeks," per The Verge.

For Samsung, launching a debit card could be a tool that extends its reach to more customers as it continues looking for ways to maintain its strong positioning in the mobile wallet space.

Samsung Pay counts fewer users than other phone-based mobile wallets, though it also has a smaller audience base. Last year, Samsung Pay counted an estimated 10.8 million US users — below Google Pay's 10.9 million users and Apple Pay's 30.3 million. It's worth noting though that the wallet is available to a smaller audience, since Samsung customers only comprise a subset of Android users and the service isn't available on every phone. Adding a debit card offering — the top US form of payment — won't meaningfully improve the service's acceptance, since Samsung Pay could already be used anywhere that accepts magnetic stripe payments. But it could appeal to the 25% of US adults who are un- or underbanked and might want to access a digital financial management platform.
 

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However, it boasts extremely strong engagement — something the card and accompanying features should extend. Samsung Pay's wallet sees, on average, 36% more monthly engagement than its peers, per PULSE, likely due to the combination of its wide acceptance network and robust rewards program, which incentivizes regular usage. Adding a debit card as well as digital money management tools, and tying it to those offerings, could push customers to use Samsung Pay even more regularly and make it a more valuable service for its customers.

The announcement fuels the notion that credit and debit cards, and the accounts and features that go with them, are set to be the next frontier of the mobile wallet war.

All three major phone-based wallets now have cards. Apple launched its credit card last summer, and Google's debit card is reportedly coming soon too. For Samsung Pay, it's most important for the offering to provide differentiating factors from Google Card — its closest rival — in order to bring more customers into the fold; this is likely something Samsung could accomplish in part with its robust rewards program, which is already in existence.
 

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But as mobile payment types converge, cards could be the next push for primary wallet status. Offering a debit card can also help firms combat players like Venmo and Square Cash, which have card offerings of their own, as they look to move into in-store payments and digital commerce more heavily. Over the next year, it's likely we'll see cards emerge as a key tactic for providers to grab primary wallet status, making the best partnerships and most robust offerings the key component to succeeding in the space.
 

About SoFi

SoFi is a values-driven company on a mission to help our members get their money right. We create modern financial products and services that help people borrow, save, spend, invest, and protect their money better, so that they can achieve financial independence and realize their ambitions—from owning a home to saving for retirement, paying off their student loans, and more.
 

About Samsung

Samsung Electronics is a global leader in technology, opening new possibilities for people everywhere. Through relentless innovation and discovery, we are transforming the worlds of TVs, smartphones, wearable devices, tablets, digital appliances, network systems, medical devices, semiconductors and LED solutions. Samsung is also leading in the Internet of Things space through, among others, our Smart Home and Digital Health initiatives. Since being established in 1969, Samsung Electronics has grown into one of the world’s leading technology companies, and become recognized as one of the top 10 global brands. Our network now extends across the world, and Samsung takes great pride in the creativity and diversity of its talented people, who drive our growth.