The highly anticipated launch of the third big mobile “Pay” player is finally here.
Just weeks after Android Pay announced its debut into the mobile payments ecosystem and just about a year since Apple Pay made its, Samsung Pay is set for its U.S. market debut today (Sept. 28).
And the question is simple: Will Samsung Pay, with its different approach to payments using mobile at the physical point of sale, be the payments player that makes consumers reach for their phones and not their plastic cards?
Well, it’s likely going to be a while before anyone knows that answer.
Initial partners include the major credit card networks — Visa, MasterCard, Discover and American Express — and some big issuers, including Bank of America, Chase and U.S. Bank. Samsung Pay uses digital tokenization, Samsung KNOX, and fingerprint authentication to provide secure payments. The mobile payment service is compatible with most existing and new terminals, including most magnetic stripe, EMV and NFC terminals.
“Samsung Pay works with almost any card terminal from day one and Galaxy owners can shop with a wallet they never knew was always in their hands,” Injong Rhee, EVP of Samsung Electronics, Global Head of Samsung Pay, said in a company news release. “As the leader in innovation, Samsung is proud to introduce the first mobile payment solution that allows you to pay almost anywhere you can swipe or tap your card today.”
Samsung Pay will work on Galaxy S6, S6 edge, Note5 and S6 edge+ devices operating on the AT&T, T-Mobile, Sprint and U.S. Cellular networks in the United States.
For consumers wanting to use Samsung Pay, they will need a participating MasterCard, Visa or American Express card issued by Bank of America, Citi, American Express or U.S. Bank. Samsung Pay also offers merchant credit cards through its relationship with Synchrony Financial and additionally, works with acquirers including First Data, Global Payments and TSYS.
Samsung Pay comes into the market with the same tokenization features of the other “Pay” players; it is part of MasterCard’s Digital Enablement Services and Visa’s Digital Enablement Program.
But the big difference, of course, is its MST technology, which enables Samsung Pay acceptance at just about every terminal that today accepts any mag stripe or EMV card without merchants having to change anything at their points of sale to accept payments made using it.
In South Korea, where it was trialed this past summer, it was able to onboard 500,000 consumers in just about a month, who drove 1.5 million transactions accounting for $30 million in transactions in its first month, far overshadowing prior attempts by other players in Korea to make hay at the physical point of sale using mobile devices.
Here’s more of the latest and greatest Samsung Pay news since the company announced that it was getting into the mobile payments race.
Samsung has said that its new mobile payments platform has debuted with a bang in South Korea, processing more than $30 million in transactions in only its first month, a tally that the company termed as “beyond our expectations.”
As reported on Sept. 24, Samsung Pay has processed more than 1.5 million transactions to date. The Samsung mobile payments technology traces its genesis to the acquisition of LoopPay. Samsung announced in February 2015 that it had acquired LoopPay, a mobile commerce platform that uses its Magnetic Secure Transmission (MST) patented technology to turn existing mag stripe readers into mobile contactless receivers. That makes LoopPay digital wallet users able to pay at more than 90 percent of merchant establishments today.
The 1.5 million transaction level reported by the company breaks down a bit to show that of those using the new service, as much as 10 percent have been using Samsung Pay on a daily basis. Apple, for its part, has not offered up similar metrics for its Apple Pay service, which has already had greater geographic reach than Samsung, as it is already available in both the United States and Europe.
Within 24 hours of a report that suggested that Samsung was not really all that concerned with Android Pay came the news that the launch of its mobile payments solution, Samsung Pay, would be delayed. What was initially scheduled to be a summer 2015 rollout turned into late September.
In June, MPD CEO Karen Webster chatted with Will Graylin, global co-GM of Samsung Pay and CEO of LoopPay, about just what was behind the decision to delay Samsung Pay.
“The delay of launch is not because of any softness on Samsung’s commitment or capabilities to get the product out,” Graylin told Webster in an exclusive interview at the time. Graylin noted that the delay was pushed back to a key month for Samsung: September, the time of the potential introduction of Samsung’s next “flagship” smartphone product.
Which we know now to be the Galaxy S6 edge.
“If you put two and two together, you’ll see that [September] makes sense. It’s where we can actually get the most bang for the buck,” Graylin said. “So that’s one misconception [about the delay until September] that people need to be clear about.”
Graylin also provided some insight as to why Samsung thought September was the best time to introduce Samsung Pay to the world.
“If anything, we think that by the time we launch (in September), that we will have significant announcements associated with which banks, which networks are participating with Samsung Pay and even which merchants and which programs attached to merchants will all be a part of Samsung Pay,” Graylin said.
Which we know now to be its launch partners, including Synchrony Financial, an issuer of private label cards.
Anyone in the mobile payments world has to differentiate themselves from Apple Pay — and Samsung is no exception. And that’s exactly what it did in a recent commercial.
“The most accepted mobile payment.”
That’s how Samsung wraps up its latest Samsung Pay commercial featuring the new Galaxy S6 edge and its mobile payments app, Samsung Pay. And in that commercial, Samsung is certainly not shy about taking on Apple Pay — going as far as featuring an iPhone attempting to use Apple Pay at a merchant, only to have it rejected.
Set to the tone of Julie Andrew’s “My Favorite Things” in a more modern, upbeat cover version, Samsung debuted this ad during the 67th Primetime Emmy Awards. In the commercial, Samsung shows off consumers buying their “favorite things” and doing so effortlessly using Samsung Pay.
The music, of course, stops when the iPhone comes in to pay via Apple Pay but quickly resumes once the Samsung phone moves back into the picture. Samsung also used the commercial to highlight that Samsung Pay has the early backing of major payment networks and issuers.
Gemalto announced in July that it has partnered with Samsung to help push the launch of Samsung’s mobile payment service, Samsung Pay, using Gemalto’s Allynis Trusted Service Hub.
With this new partnership, Gemalto and Samsung are working to develop payment issuer/networks relationships to help Samsung’s European launch. Like Apple Pay, Samsung Pay offers consumers the ability to pay via a mobile device using NFC payments.
“We are excited to work with Gemalto as they offer Gemalto’s hub services worldwide that offer a secure payment card digitization solution to Samsung Pay,” said Injong Rhee, EVP of Samsung Electronics and global head of B2B Solutions. “With Gemalto’s technologies, Samsung Pay will be able to deliver a simple, secure and everywhere mobile payment experience to more consumers.”
The goal of Gemalto’s Allynis TSH solution is to offer payment issuers an accelerated path to launch mobile payment services, which includes integrating streamlined user enrollment, service installation and lifecycle management of payment credentials/tokenization services. Overall, the main objective is to simplify the process to get support from issuers by taking the friction out of the user’s experience.
Samsung Pay arrived in the U.S. in August — though only on a trial basis.
Select owners of Samsung’s Galaxy phone lines — S6, S6 edge, S6 edge+ and the Note5 — got the chance to take Samsung’s answer to Android Pay and Apple Pay on a test drive. The service allows users to upload cards into the Samsung mobile wallet and then use said phone to pay.
We were part of that test group, and it worked well. It was easy to provision the card to the phone and worked in all but one case. The most interesting part of using Samsung Pay is the reaction of the sales associates who are convinced that you’re nuts when you try to use the phone to pay then high-five you when it works and think you are a mobile goddess for having shared the experience with them.
That ubiquity of acceptance is, of course, Samsung’s secret sauce. Both Apple and Google are NFC (or mobile) locked at present, meaning customers can only tap into said services if the merchant they happen to be patronizing at the moment has an NFC-compatible terminal. Though, theoretically, such compatibility will become more widespread as the EMV integration rolls on (many EMV terminals are also NFC-compliant). At present, the saturation of the tech in the merchant community is fairly low — particularly when stacked up against the dominant mag stripe hardware ecosystem.