Samsung's new mobile payments system is now official, arriving as Samsung Pay and promising to work with existing point-of-sale (POS) systems.
Mobile payments are increasingly gaining momentum and things are expected to heat up even further this year, with several notable players now on the arena. Apple introduced its Apple Pay back in the fall of 2014, Google recently announced that it acquired Softcard and is expected to launch a Google Wallet alternative soon, and Samsung has now joined the fray with its new Samsung Pay.
Just like most mobile payments systems, including Apple Pay, Samsung Pay will use NFC to make payments on POS systems that accept tap-to-pay. On the other hand, Samsung Pay has another ace up its sleeve, as it will also work with the same technology credit cards use, namely Magnetic Secure Transmission (MST). This will allow Samsung Pay to work at existing POS systems and cash registers, regardless of whether they work with NFC or not. In other words, if a cash register supports magnetic-stripe credit cards, it will also work with Samsung Pay.
"Today Samsung Electronics Co. Ltd. announced the latest in mobile payment services, Samsung Pay, ushering in a new era of mobile payments and ecommerce. Samsung Pay allows consumers to transition to secure mobile payments at nearly all merchant locations," Samsung announced in a press release on Sunday, March 1. "To date, mobile wallets have had extremely low acceptance with merchants utilizing conventional magstripe terminals. With Samsung Pay, consumers can now utilize their mobile devices to pay at existing point-of-sale terminals. To achieve this, Samsung leverages both Near Field Communication (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 has already teamed up with major payments networks for its new Samsung Pay. Current partners include MasterCard and Visa, and the company is working on securing more partnerships with American Express, Bank of America, Citi, JPMorgan Chase, U.S. Bank, and other key financial partners worldwide.
"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."
The company estimates that roughly 30 million retail locations worldwide will accept Samsung Pay at launch.
When it comes to security, Samsung Pay will rock ARM TrustZone and Samsung's much-touted KNOX security software, which is widely seen as one of the best security software systems for mobile devices. Samsung Pay will not store personal account numbers on a user's device, and will use tokenization to protect the user's cerdit card information when making a transaction. Samsung's Find My Mobile feature, meanwhile, will allow users to lock and disable their device remotely if they misplace or lose their phone, so Samsung Pay would no longer be accessible. Moreover, Samsung Pay will also use fingerprint recognition to verify all payments.
In terms of availability, Samsung Pay will initially launch in the U.S. and Korea this summer, with other regions such as Europe and China set to follow afterwards. The company's new mobile payments solution will only work with the latest Samsung Galaxy S6 and Galaxy S6 Edge, at least at first. Samsung failed to mention at this point whether Samsung Pay will expand to other devices as well.
