At its Galaxy Unpacked 2015 event at the sidelines of Mobile World Congress, Samsung announced its take on Apple Pay by launching its own Samsung Pay mobile wallet feature. The mobile payment option works with both NFC magnetic strip payment terminals, a key differentiating feature that separates it from Apple Pay can work only on NFC-enabled terminals. The feature will work with both the Galaxy S6, and Galaxy S6 Edge smartphones that the company launched today.
The South Korean technology conglomerate noted that merchants will have to pay 2-3 percent interchange fees, which sounds like a fair deal considering that they won’t have to invest any cash on the NFC point of sale systems. Samsung Pay also offers support for NFC, though that isn’t a sole requirement. And that makes the world of a difference, the company notes.
“Samsung Pay will reinvent how people pay for goods and services and transform how they use their smartphones,” said JK Shin, CEO and Head of IT & Mobile Communications Division at Samsung Electronics. “The secure and simple payment process, coupled with our robust partner network, makes Samsung Pay a truly game-changing service that will bring value to consumers and our partners in the ecosystem.”
Compared to Apple Pay which only has about 3 percent of presence in US retail market, Samsung Pay, thanks to the magnetic strip technology is already compatible with 90 percent of retailers. The company has also partnered with Mastercard and Visa, two of the world’s largest players. “We are excited to work with Samsung as they deliver Samsung Pay to consumers around the globe,” said Ed McLaughlin, chief emerging payments officer, MasterCard. “The security and simplicity we are able to deliver through our digital enablement service is rapidly changing the way consumers can shop. The launch of Samsung Pay will continue to drive momentum for mobile payments and provide a broader set of digital experiences.”
Samsung is able to provide support for magnetic strip terminals because of LoopPay’s technology that is built right into it. The South Korean electronics giant had acquired LoopPay last month. The technology uses a tiny metal coil to generate a magnetic current to the credit card reader. The mechanism is a lot different from NFC, which requires users to tap a device against a compatible sensor.
The company assures that using Samsung Pay will be pretty easy and will require little learning. The company also assured that Samsung Pay won’t keep their personal account numbers on the phone, and much like Apple Pay it also uses tokens, that assigns a unique ID for each transaction. The mobile payment option is secured by Samsung’s own KNOX security platform and ARM TrustZone to tackle data fraud.