Paying Dividends: Samsung Pay on the Crest of Mobile Payment Wave
Samsung Pay: Part 1
Commerce has come a long way since the days of bartering and trade. Cattle and grain were some of the first forms of what we would call money today. It wasn’t until around the 5th or 6th century that coins came into wide usage, allowing consumers to leave their cows at home when they went shopping. Paper money emerged in China in the 11th century, and credit cards came along in the early 20th century, both ushering in unprecedented eras of convenience.
Of course, the most recent developments in the consumer shopping experience has come with the explosion of online shopping over the last two decades. However, the way people pay when they shop in-store is about to see yet another innovation, which could revolutionize consumer culture.
Mobile payment is a burgeoning phenomenon in the world of retail and commerce, which appears set to change the way people shop for goods and services and will combine all physical cards into one neat digital package. Mobile payments allow users to pay at points of sale using their phones, with just a quick tap, using credit card information encrypted into Samsung Pay. Up until now, competing mobile payment services have been accepted by only a very small number of participating retailers. That is all about to change. With the popularity in mobile payments heating up, Samsung is set to make a huge splash with Samsung Pay.
Starting this summer, Samsung Pay will be available free of charge in the United States and South Korea for users of Samsung Galaxy S6 and S6 Edge after a firmware update. Europe and China are slated to follow.
What really sets Samsung Pay apart from the existing services is that it can be used almost anywhere credit cards are accepted. Most existing mobile payment services can only be used at retail locations with Near Field Communication point of sale systems. While steadily growing, Near Field Communication (NFC) is still only available at a limited number of US retailers.
Samsung Pay, in addition to being compatible with NFC, will also work on regular magstripe credit card readers – the standard credit card payment terminals found at most shops and restaurants thanks to a technology called Magnetic Secure Transmission (MST). Nearly all retailers with magstripe readers will not need to upgrade their terminals to accept Samsung Pay. This represents a major breakthrough in the world of mobile payments, and means that Samsung Pay has the potential to be accepted at majority of retailers, giving it a massive advantage over the competition.
Whether NFC or MST, the payment process is the same. Users pull up the Samsung Pay app by swiping up from the home button, select a card in Samsung Pay, authenticate the transaction with the fingerprint sensor, and tap to pay.
In effect, Samsung Pay will allow users to keep all their credit and debit cards on their mobile device. Samsung has already partnered with an ever expanding list of banks and credit companies, including Visa and MasterCard. Because Samsung Pay replaces sensitive card data with a unique, secure token to prevent fraud and because transactions cannot be completed without fingerprint verification, Samsung Pay is more secure than using physical cards.
Samsung Pay’s combination of widespread availability and security features make it the most enticing mobile payment service yet. When Americans and South Koreans go shopping this summer, more and more will surely be leaving their wallets at home.
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