Samsung, the South Korean business giant, has been the world's biggest mobile phone manufacturer for many years, with a market share that is almost double its nearest competitor (Apple). However, despite its size, (and unlike Apple and Microsoft) Samsung never developed their own operating system.
Samsung smartphones typically run on Google Android operating systems. This has meant Samsung could focus on devices, rather than software, which helped it power ahead of its rivals in terms of units sold. However, as smartphones have become more pervasive, this device-only strategy has left Samsung disadvantaged in the potentially lucrative digital wallet/payment market. Especially since Google already offer a compelling solution to most Samsung users.
Not to be outdone, in 2015, Samsung launched its own digital wallet 'Samsung Pay' in South Korea.
What is Samsung Pay?
Samsung Pay is a contactless payment system for Samsung mobile phones (from the Galaxy S6 onwards). In many respects, it is similar to both Apple Pay and Android Pay, in that it enables users to pay contactlessly using their mobile phones where contactless readers are available in retail locations. However, Samsung Pay also uniquely offers its users the ability to pay contactlessly at traditional payment terminals, which only support card magnetic-stripe reads.
Samsung Pay is currently operational in Australia, Brazil, China, Singapore, South Korea, Spain, and the USA, with plans to launch in six more countries, including the UK, before the end of 2016.
What are the user benefits of Samsung Pay? As with competitor digital wallets (like Apple Pay and Android Pay), the main advantage that Samsung Pay offers its users is the simplicity and convenience of mobile payment. No longer do users need to take a purse or wallet full of credit and debit cards with them, alongside their phone.
Beyond the benefits that all digital wallet users experience, Samsung Pay also offers users a number of unique benefits.
Magnetic Secure Transmission (MST)
The most obvious benefit that Samsung Pay offers over rival e-wallet systems is its retrofit compatibility with older magnetic-stripe card readers. It does this by creating an electromagnetic field using the mobile handset, which is read by the terminal as a traditional magnetic-stripe. MST enables Samsung Pay to be available far more widely than mobile wallets which rely on newer NFC chip (Near Field Communication) readers.
Unlike Apple Pay, which only enables direct mobile payments on it's latest handsets, Samsung handsets from the Galaxy S6 (which launched in 2014) onwards are compatible with Samsung Pay.
In South Korea, alongside traditional digital wallet functionality, Samsung Pay also enables users to withdraw cash from compatible ATMs. This additional ability means that, for some people, Samsung devices can complete the full range of uses traditional cards offer.
How does Samsung Pay work?
Samsung Pay is available to all users of Samsung phones, from the Galaxy S6 onwards, in supported territories.
To set up Samsung Pay, you simply download the free app from the Google Play store. Once downloaded, you open the app and log in with your Samsung account. You're then prompted to set up a method for payment authentication. Firstly your unique fingerprint is stored on your phone by touching your preferred finger to the reader repeatedly until it has successfully captured your full imprint. Then, a backup password is created, which you must validate with your pin number.
Having setup the security and authentication, you can now add your payment cards to the Samsung wallet. As with other digital wallets, this process is simplified by using the camera within the app to capture an image of the card. Your phone will recognise the letters and numbers on the card, which you must confirm. You then add any additional required fields, such as the card's CVC/CVV number and your address.
Once you have completed all the required fields, you are ready to validate your card. This is done by calling your bank, or by text message or email. Your bank/credit card issuer should then send you a validation code to activate your card on the device.
Cards are deleted by entering them in the app, selecting 'MORE' from the top nav and tapping delete.
Once your cards are set up, you can make payments virtually anywhere using your device. To do this, you swipe up on the lock screen of your device to reveal your wallet. If you want to switch payment card, you swipe left and right to get to your preferred card. Then, hold your finger to the fingerprint reader, and tap the card reader (contactless or traditional magnetic-stripe).
How secure is Samsung Pay?
Samsung Pay uses the same type of 'tokenisation' system as other e-wallets to ensure card details are not disclosed during transactions. However, unlike its main competitors, Samsung's security has been called into question, with critics claiming their tokenization process is limited and predictable. Samsung has refuted the allegations, but given that it is playing catch-up with Android Pay in numerous territories, questions regarding security are unlikely to help the platforms adoption.
Which UK credit cards enable Samsung Pay?
At present, possibly due to security concerns, no UK card issuers offer Samsung enabled payments. However, Samsung is expected to launch in the UK imminently, having launched in Spain in June 2016 successfully.
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