Samsung Pay, Samsung’s answer to Apple Pay and Android Pay (from Google), has officially launched in the United States, as promised earlier. The South Korean phone maker’s own mobile payment system was earlier launched in its home country back in July earlier this year. During the first month of its launch in South Korea, Samsung Pay garnered more than $30 million in transaction volume. Samsung Pay came to be as a direct result of Samsung’s acquisition of LoopPay in February early this year, and the company is certainly banking on LoopPay’s expertise and knowledge in developing payment systems based on near field communications (NFC) technology in order to gain an advantage or at least compete with Apple’s and Google’s contactless modes of payment.
Samsung Pay basically allows mobile users to pay for items bought using their Samsung handsets through the use of NFC tech (similar to Apple Pay and Android Pay), or by emulating a magnetic stripe card. By acquiring LoopPay, Samsung also got hold of LoopPay’s patented Magnetic Secure Protection technology.
Americans are gradually beginning to shift to EMV (Europay, MasterCard, Visa) based debit and credit cards, which are considered safer than regular magnetic strip cards. But still, industry watchers believe that there will be a transition period in which not all cards used by customers have been upgraded to chip and PIN technology yet, and also, not all point of sale (POS) terminals will support EMV transactions.
What this means for Samsung is that magnetic stripe cards will still be used by a significant chunk of all card carrying customers. This is what the South Korean mobile giant is hoping to take advantage of, even if it is only for the short term only. Moreover, as POS terminals start to support EMV and NFC tech instead, Samsung will still try to have its Samsung Pay system work with them as well.
With mobile devices enabled with Samsung Pay, the tap and pay functionality works at almost any POS terminal where you can swipe your card to pay for any item purchased because of its support for magnetic stripe card emulation. As for owners of iPhones enabled with Apple Pay or Android smartphones enabled with Android Pay, users will still have to make sure if the POS supports NFC transactions before they can be able to achieve tap and pay.
Samsung Pay may have an advantage in terms of POS compatibility, but it still is painfully limited -- it is only enabled in specific Galaxy devices, namely the Galaxy S6, the Galaxy S6 Edge, the Galaxy S6 Edge+, and the Galaxy Note 5, plus the Samsung’s Gear S2 smartwatches but in selected countries only. Android Pay, by comparison, works on almost any NFC enabled Android smartphone, or at least those powered by Android 4.4 KitKat or newer. And even though Samsung Pay already works on AT&T, T-Mobile, and Sprint, it still has not snagged Verizon Wireless, the biggest wireless carrier in the US.
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