How Samsung mobile pay is transforming the mobile payment landscape
The following is a guest post (contributed article) by John Rampton, founder and CEO, Due.
Samsung Mobile Pay launched in 2015 and has been giving other mobile wallet payment providers like ApplePay and others a real “run for their money.” It is helping to push this market forward and will transform the entire mobile payment landscape. Here’s how Samsung Mobile Pay works and why it will impact the global mobile payments industry.
How Samsung Pay Works
Made to work on all of Samsung’s devices, including its Gear wearable device, Samsung Pay can work in most regions of the world. The downloadable app is activated by a consumer who then can start adding their credit and debit cards to the app along with membership, loyalty, reward, and gift cards as well as nearby deals from various retailers.
When a consumer is then ready to redeem a reward or make a payment at a point-of-sale location, they simply open the Samsung Mobile Pay app, select their desired reward/deal and/or payment card, and tap the device to the POS terminal to complete their purchase. It’s that easy.
So far, it may not sound that transformational, but more like other mobile wallet tools on the market. However, there are some things that make Samsung Pay different than all the rest of the mobile wallets.
More than any other mobile wallet technology, Samsung Pay has the potential to be a POS option at more than 30 million merchant locations throughout the world. This record number of merchant location partnerships is also tied to Samsung’s strategy to form relationships with all the major credit card brands and numerous well-known banks that issue credit and debit cards around the globe. These include Visa, MasterCard, American Express, Bank of America, U.S. Bank, JP Morgan Chase and Citibank.
Then, there is the acceptance on a consumer and business level of mobile payments, in general, which means that Samsung couldn’t have picked a more opportune time to enter the market right on the cusp of what is viewed as mass adoption of this payment method.
Advanced Payment Technology
Another reason for this greater global acceptance of Samsung Pay is Samsung’s utilization of Near Field Communication (NFC) and its Magnetic Secure Transmission (MST) technology, which can support modern payment card options as well as the legacy card equipment choices like the traditional magstripe.
Since Samsung mobile phones have this MST technology built in, Samsung Pay is able to copy a card swipe as it sends tokenized payment credentials from the app to a payment terminal. It’s this technology that also means that Samsung Pay can support all types of payment cards, including private label credit cards that have not been previously been allowed to be used at a POS machine because they are more like lines of credit than traditional credit cards.
Superior Security Features
Some consumers and businesses have hesitated using mobile wallets due to their concerns over security, but Samsung is also tackling this area, helping to change the landscape and convince more people to make the switch. This change and movement is taking place with their KNOX mobile security platform and ARM TrustZone, which are able to protect all transaction information from breaches, attacks, and fraud. Basic for all who are worried about what happens when they misplace or have their phone stolen, Samsung’s Find My Mobile feature provides a way to locate, lock and wipe data before anyone else gets a hold of the information.
Samsung has taken security precautions even farther with reinforced tokenization. Any sensitive card data is replaced with a unique token. It is this issuer tokenization technology that Samsung adopted at an early stage, putting it ahead of other mobile pay app providers. With benefits like greater control, flexibility, and enhanced transaction security, Samsung has been winning over more consumers and businesses compared to the other brands.
A unique feature of this security is that users can continue to pay with their plastic card and use any other device where they have the app even if another device has been lost or stolen. This maintains security while offering convenience to the user.
Researchers See Significant Impact from Samsung Pay
Research firms have provided greater context as to why Samsung Pay could have greater impact on the overall mobile pay environment. As Gartner's Market Trends report on mobile wallet adoption noted, consumers aren’t just going to start using mobile payments because it is mobile.
Instead, the consumer must have a compelling reason to select this payment option over merely pulling a plastic card out of their physical wallets. Gartner cited that the convincing the public will require new features, enhanced security, greater convenience and a low cost. These compelling reasons have been addressed by Samsung Pay and they have proven they can deliver.
This includes offering a way to use whatever payment solutions a retailer has, regardless of its is a legacy or modern system. Providing fewer barriers for merchants to add Samsung Pay to their payment acceptance options, secure mobile payments for private label credit card companies, and new global opportunities all put Samsung Pay choices and alternatives into the market.
Thanks to partnerships with financial technology firms and card issuer brands Samsung Pay has gained entry into most payment providers selections. No other mobile wallet solution has gone to this much effort, which is why Samsung Pay is poised to truly change the mobile payments landscape.
About the Author
John Rampton is an entrepreneur, investor, online marketing guru, and startup enthusiast. He is the founder of the online invoicing company Due. John is best-known as an entrepreneur and connector. He was recently named #2 on Top 50 Online Influencers in the World by Entrepreneur Magazine and a Blogging Expert by Time. He currently advises several companies in the San Francisco Bay area.