Samsung has a new mobile payment solution it announced today, though it will require a few more months before it arrives on the new Galaxy S6 and S6 edge smartphones this summer. It’s called Samsung Pay, and it uses the magnetic secure transmission (MST) tech that Samsung acquired via its purchase of LoopPay last month, which means the vast majority of U.S. retailers should be able to accept it without any change to their existing hardware or infrastructure.
The Samsung Pay service will also use NFC, meaning it should work with the kinds of terminals required by retailers to offer Apple Pay, but the MST tech means that it can talk even to old-school credit card swipe readers, via tech developed by the Kickstarted Boston-based startup LoopPay, which Samsung acquired in total after a partnership begun near the debut of their crowdfunding campaign.
Samsung also has deals in place with MasterCard and Visa on the payment provider side, and is working on arrangements with American Express, Bank of America, Citi, JPMorgan Chase, U.S. Bank and others. Based on its ability to work with existing magstripe terminals, Samsung estimates that it could reach up to 30 million merchants worldwide, so long as the payment providers all come on board.
In practice, it’ll work by being integrated into Samsung devices at the system level, letting users add their own existing cards, and then working via a swipe up from the bezel, which launches the Samsung Pay app and lets them choose their payment card option. Then they use the new finger print sensor to authenticate the transaction (which, thanks to the new touch-based fingerprint reader on the GS6, seems clearly borrowed from Apple Pay) and then tap the merchant terminal to complete. It requires a few more steps than Apple Pay, which automatically launches payment and chooses your default card when you’re in proximity of an active terminal, meaning the fingerprint authentication is the only step required by a user.
Samsung Pay’s ability to work with legacy infrastructure should help it maximize its potential reach, however, which means it could have an easier time convincing merchants, leaving it to focus its attention on educating and motivating users about adopting the behavior.
On the security side, Samsung is using KNOX and ARM’s TrustZone data isolation tech for processors to keep payment card information safe, and Samsung Pay uses tokenization to add an additional layer of security on top of standard magnetic card swipes. It’s aiming for a summer launch, with U.S. and Korea pegged as the launch countries, with expansion to Europe and China planned after that.