The Mobile World Congress 2015 brought various new products that will likely shape the future. Samsung Elect Ltd for one unveiled its much hyped Galaxy S6 and Galaxy Edge to the world, and also took the wraps off its new payments system, Samsung Pay.
Mobile payments have been one field as of late where most major smartphone players are rushing to get to the top. Recently acquired LoopPay by Samsung Elect Ltd (F)(OTCMKTS:SSNLF) has helped the South Korean electronics maker enter the payments game.
Samsung Pay will allow users to link their credit, debit, and loyalty cards to the Galaxy S6, and allow them to buy whatever they need, while also adding or redeeming loyalty cards. However, if you’re thinking this is the same thing Apple Inc. (NASDAQ:AAPL) and Google are offering through Apple Pay and Google Wallet, you’re in for a surprise.
LoopPay helps gives Samsung an edge over Apple and Google Inc (NASDAQ:GOOG) because it works with the already-set-up magnetic stripe machines that are all over the United States. Samsung states it has partnered up with MasterCard, Visa, American Express, Citigroup as well as other financial institutions to get the service rolled out.
The way Samsung is going to go ahead is that retailers will have to install the next generation Neat Field Communication (NFC) readers for them to be able to accept Apple Pay and Google Wallet payments. Meanwhile, Samsung Pay will already and easily work with cash registers around the US.
Meanwhile, Apple has stated Apple Pay is available at around 220,000 locations in the US, but that doesn’t amount up to much when the country has around 12 million checkout registers.
Major credit/debit card networks are pushing that retailers get the technology for chip and pin technology, however, smaller retailers might not want to switch because of the high costs. Samsung will have an in here as its payments service will work with the old cash registers, while also functioning with NFC readers.
Wall Street Journal reports that if, for example, a checkout machine has an NFC reader, users can pay with that. In case there isn’t, a user can hold their smartphone near the cash register and the payment will go through. Samsung gets the better end of both the deals, while Apple Pay is only available in one mode. Moreover, Samsung will be using tokenization for the process of its payments to add some security elements to the mix.
Jim McCarthy, global head of innovation and strategic stated: “This is a pretty big step forward. Samsung Pay’s acceptance is very broad because it can use the old terminals, while also running on the existing tokenization system that we have set up for Apple Pay. These devices will work at almost any terminal in the US.”
Samsung Pay will roll out in the US and South Korea later this year, and will eventually release in Europe and China. To read more about the way Samsung Pay (formally LoopPay) works, check out a previous article on it by Bidness Etc.