Samsung Pay ready to take on Apple

02 March 2015

Apple may have beaten it to the pay-by-phone punch, but Samsung has revealed that its own mobile payments system will soon launch across the United States.

The inventively-titled Samsung Pay technology is one of the big features of the company’s just-announced Samsung Galaxy S6 and Galaxy S6 Edge flagship devices. The system will allow users to leave their wallet at home and make contactless payments using just their smartphone.

It’s a similar payment method to Apple Pay, which launched late last year on the iPhone 6 and 6 Plus. But the big difference is that while Apple Pay relies exclusively on near-field communication (NFC) to work, Samsung Pay is a lot less limited.

The bad news? Like Apple Pay, there's no word on when - and if - the feature will be available in countries outside the US (with the exception of South Korea, which is also scheduled for a mid-year launch).

Bigger than Apple Pay?

Samsung owners will be able to make purchases via NFC, but the payment technology will also work with regular magnetic stripe readers – a detail that already gives Samsung an advantage over its biggest rival.

While 200,000 US retailers support Apple Pay, that’s only around 3% of American merchants – not a huge number. However, because Samsung Pay will work with any terminal with a magnetic stripe, the system will automatically be accepted by a much, much bigger range of retailers than Apple’s NFC-only version – about 90% of stores.

The magnetic secure transmission (MST) technology comes from LoopPay, a mobile payment startup acquired by Samsung earlier this month. In addition to snapping up LoopPay, Samsung has partnered with MasterCard and Visa, and is expected to add American Express and various major US banks to its Samsung Pay partners in the coming months.

How it works

Like Apple Pay, Samsung Pay will require users to authorize transactions through a fingerprint scanner. The payment system can be activated by swiping upwards on a device’s home screen, selecting the credit or debit card that you wish to use, and then tapping your phone against an electronic terminal.

Samsung says that Pay will use unique tokens at the point of sale to protect your data and identity, with no card details or personal info recorded during a transaction. The system will also be protected by Samsung’s KNOX security platform.

The Korean electronics giant is confident that the product will give Apple Pay a run for its money, describing Samsung Pay’s use of MST and NFC as ‘device, merchant and card issuer agnostic’. Basically, if you’re a Samsung Pay user, you’ll automatically be able to use the product at more retailers - and choose from more supported banks and credit cards - than you would through Apple Pay.

While it’s good news for Samsung, Android users may soon have two mobile payment options to pick from. Google has just acquired another carrier-backed mobile payments company, Softcard, that will potentially allow it to expand its Google Wallet contactless payment tool on to more Android devices than ever.



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