The Apple Doesn’t Fall Far From the Tree
This week at the Mobile World Congress in Barcelona, Samsung and MasterCard unveiled a new mobile payment system called Samsung Pay. It shouldn’t come to anyone’s surprise that Samsung would release an almost déjà vu-like mobile payment system just six months after the release of Apple Pay, but alas the company did and it might finally have a slight advantage over Apple – for now.
According to Business Insider, Samsung acquired Magnetic Secure Transmission (MST) technology inventor LoopPay in February. Unlike Apple Pay, which requires the use of near-field communication (NFC), Samsung Pay “will work with any terminal with a standard magnetic stripe credit card reader and NFC.” This means that nearly 90% of merchants in the US are already capable of accepting LoopPay transactions over Apple Pay.
For April’s release, Samsung will equip its new Galaxy S6 and Galaxy S6 Edge with Samsung Pay, but the software will not be available to use until this summer. Much like Apple Pay, the consumer can upload their credit cards by manually entering in the information or by simply taking a picture of the card itself. Once the information is stored, the consumer will have to use their fingerprint in order to access Samsung Pay. The transaction can then be completed through NFC or by placing the phone near the magnetic stripe on the credit card reader. By LoopPay’s design, the metal coal inside the phone will generate a magnetic current to the credit card reader. Much to the consumer’s delight, Samsung Pay automatically determines which payment method is compatible for the transaction before the consumer lifts a finger.
As far as security concerns go, Samsung Pay and MasterCard have worked diligently on this matter. Business Insider states that “transactions going through Samsung Pay will create unique tokens whether you’re using an NFC terminal or a magnetic card reader.” Each one-time use encrypted token is unique to that transaction and makes it highly unlikely for hackers to breach the system.
There has been no word on which companies will support Samsung Pay other than MasterCard, but since it’s easily compatible with millions of retailers already, Samsung Pay shouldn’t have any problem finding supporters once it is launched.