Samsung Pay joins crowded mobile wallet race

Google and Apple are just two of the rivals Samsung will face

Samsung Pay

Samsung Pay

Samsung will launch its mobile payment service next week, a crowded market which includes heavyweights Apple and Google.

Samsung Pay will be available in South Korea on August 20 followed by the US on Sepember 28. The system will eventually be rolled out in the UK, Spain and China, Samsung said, although it didn't offer a time frame for this expansion.

Samsung's original rollout plans, announced in March at Mobile World Congress, called for Samsung Pay to appear first in the U.S. this summer.

Unlike rival contactless payment systems like Apple Pay and Android Wallet, Samsung Pay doesn't exclusively use NFC technology to communicate with credit card terminals.

Instead, it relies on a technology called Magnetic Secure Transmission (MST) to pass along the information in a card's magnetic strip to terminals already used by retailers. This means a phone using MST can be used to purchase items at nearly any payment terminal.

The expense of installing NFC-compatible terminals has prevented many retailers from adopting the technology, hindering the use of mobile wallets. Samsung CEO J.K. Shin noted these concerns during an event in New York where he also announced the company's newest smartphones. Shin said merchants can accept Samsung Pay without added costs while people can use the system at almost every store that takes credit cards.

Even though Samsung talked up MST, its payment system will also work with NFC.

Samsung acquired MST technology in February after purchasing mobile payment company LoopPay. At that time, LoopPay claimed MST works in approximately 90 percent of the point-of-sale terminals in the U.S. A Samsung spokeswoman added that less than 10 percent of U.S. retailers used NFC.

Samsung Pay will come installed on the company's latest smartphones, the Galaxy Note 5 and Galaxy S6 edge+. Starting in the middle of August, a software upgrade will let Galaxy S6 and S6 edge owners in the US and South Korea install Samsung Pay.

Instead of exchanging credit card details with a terminal, Samsung Pay uses tokenization to pass along a temporary code, a system found in other contactless payment systems. Customers use their fingerprint to confirm a purchase.

Samsung is working with South Korea's major credit card companies on incorporating Samsung Pay into payment networks. In the U.S, Samsung will work with credit card issuers like American Express, Visa and MasterCard as well as large banks, including Chase and Bank of America.

At least one U.S. credit card company has already said it's supporting Samsung Pay: Discover customers will be able to use Samsung Pay at some still undetermined point in 2016.

Tech companies aren't the only ones developing contactless payment systems. Merchants including CVS and Walmart are part of a retail group building its own mobile wallet called CurrentC.

Fred O'Connor writes about IT careers and health IT for The IDG News Service. Follow Fred on Twitter at @fredjoconnor. Fred's e-mail address is fred_o'connor@idg.com

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags mobilesmartphonessamsungconsumer electronics

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Fred O'Connor

IDG News Service
Show Comments

Brand Post

Bitdefender 2018

With determination and drive, you achieve outstanding performance! Get Bitdefender Total Security 2018 Now!

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?