Secure and easy to use mobile payment service to be made available at more merchant locations than competing offerings this summer
Mobile World Congress: Samsung Electronics has announced its new mobile payment services, Samsung Pay, which allows consumers to transition to secure mobile payments at nearly all merchant locations as it will be usable at all retailers accepting debit and credit cards as well as NFC.
To date, mobile wallets have had extremely low acceptance with merchants utilising conventional magstripe terminals, Samsung said. With Samsung Pay, consumers can now utilise their mobile devices to pay at existing point-of-sale terminals. To achieve this, Samsung uses both NFC and a new proprietary technology called Magnetic Secure Transmission (MST) to make mobile payments more accessible to merchants and consumers than ever before. Samsung Pay therefore has the potential of being accepted at approximately 30 million merchant locations worldwide, making it the only mobile payment solution with near universal acceptance.
Justin Denison, vice president, product strategy and marketing at Samsung Electronics America, commented at the Samsung Unpacked unveiling of Samsung Pay and its Galaxy S6 and S6 edge devices on Sunday evening that Samsung did not want to go with mobile payments until the technology was right. He explained: “NFC is not universal. It limits you to 10% of merchants in the US. So we created Samsung Pay, which enables you to pay using MST anywhere that accepts debit or credit cards on the magstripe, and NFC.”
To deliver a best-in-class mobile payment solution, Samsung has partnered with major payment networks such as MasterCard and Visa. Additionally, Samsung is working hard to expand the partnership ecosystem for Samsung Pay with key financial partners globally, including American Express, Bank of America, Citi, JPMorgan Chase, and U.S. Bank, to provide greater flexibility, access, and choice for customers while enabling a simple and secure payment experience.
Samsung Pay will initially be available in the US and Korea this coming summer and will expand to other regions, including Europe and China, with the release of the new Samsung Galaxy S6 and Galaxy S6 edge.
“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.”
In addition, the MST technology enables Samsung Pay to support private label credit cards (PLCC) with the cooperation of key partners, including Synchrony Financial and First Data Corporation. The engagement with merchants, issuing banks, and major payment networks offers customers the opportunity to use a wide range of payment cards and makes Samsung Pay a truly universal mobile payment solution.
Adding a card requires a few simple steps. Once added, the user simply swipes up from the bezel to invoke the Samsung Pay app, chooses the desired payment card, and authenticates with the biometric fingerprint sensor. Tapping the device to the point-of-sale (POS) terminals allows for a fast, secure, and easy purchase.
On security, Samsung Pay does not keep personal account numbers on a consumer’s device. In addition, Samsung Pay provides many security features that make it safer than a physical card. When combined with tokenisation – replacing sensitive card data with a unique, secure token to prevent fraud – Samsung Pay will deliver secure mobile payments worldwide.
Commenting on the launch of the Samsung Pay, Phil McGriskin, managing director at payment company, Worldpay Futures, said the increasing numbers of smartphones offering mobile payment is only going to mean an increase in users of the services.
McGriskin explained: “After the launch of Apple Pay and Google Wallet’s new Softcard alliance, it is no surprise that Samsung is looking to include NFC payment on its latest model. While we have seen a huge 386% growth in contactless in the UK, there is still some scepticism in using phones rather than cards for consumers, but as more smartphones come on board this will normalise NFC payment technology for many. All of this will hasten the demise of the physical wallet, particularly where high volumes of low value transactions cause queues.”
Jim McCarthy, executive vice president at Visa, stated: “Mobile commerce just got a lot more interesting. Combining Visa’s expertise in payment technology with Samsung’s leadership in creating innovative mobile experiences, gives more choice to financial institutions who want to enable their customers to pay by phone.”