Samsung Pay to Roll Out This Summer, Expanding Merchants’ Mobile-Payment Reach (March 2, 2015)
Samsung Electronics Co. unveiled details of Samsung Pay, its mobile payments service set to roll out in the U.S. this summer to compete with Apple Pay and Google Wallet, further expanding the potential audience—and merchants—that can participate in the tap-to-pay experience. The announcement made March 1 at Mobile World Congress coincided with the introduction of the new Galaxy S6 phone, which will come with built-in technology to enable Samsung Pay, including NFC and magnetic secure transmission (MST), enabling mobile payments at 90 percent of the nation’s POS terminals, including those equipped only to accept magnetic-stripe cards. Samsung earlier this month purchased LoopPay, a startup that developed MST as a way to enable a form of contactless payments at terminals that lack NFC, which Google Wallet and Apple Pay require. Analysts estimate only about 10 percent of U.S. terminals are NFC-enabled, although that number is growing with the transition to EMV.
Visa and MasterCard separately announced plans to back Samsung Pay, and each network emphasized that—like Apple Pay—Samsung’s new payments service will be secured by their respective tokenization services, which replace the 16-digit number on payment cards with a unique series of numbers that can be used to authorize payment without exposing sensitive account details. To use Samsung Pay, Visa or MasterCard customers will select the card they want to use and hold their S6 handsets near a payment terminal to transmit payment information. The curved S6 also features a new fingerprint sensor that replaces the previous fingertip-swipe motion, to enhance convenience, Samsung said.
The mobile payments field is expanding rapidly, but simply tapping to pay is not the main objective of these innovations, according to Tim Sloane, an analyst with Mercator Advisory Group. “This isn’t so much about how the payment is conducted, but about the data . . . and new marketing opportunities mobile payments opens up,” he told attendees during a panel at the All Payments Expo last week in Las Vegas.
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