Samsung Electronics has accelerated moves to globalize its mobile payment service, Samsung Pay. The fact that Samsung Pay does not require a separate payment terminal gives an advantage over other services, and its competition with Apple Pay to lead the market is expected to heat up.
The Korean tech giant revealed an official version of Samsung Pay during this year's Galaxy Unpacked event in New York on Aug. 13 (local time), marking the point when competition with Apple Pay began in earnest.
Samsung Pay enables users to make payments with credit card information stored on their smartphone. The most notable characteristic of the service is that it allows users to make an automatic payment by tapping a mobile device onto a credit card magnetic swipe terminal, using a magnetic secure transmission (MST) tech that replicates credit card payment information with a magnetic signal.
Samsung is scheduled to officially introduce the service to Korea on Aug. 20 and to the U.S. on Sept. 28 as well, after a month of testing. Starting with Korea and the U.S., the firm plans to introduce the service to other countries, including Europe and India.
The keyword of the strategy for Samsung Pay is versatility. To use Apple Pay, affiliated stores are required to install NFC-enabled terminals. In contrast, the MST tech makes it possible to use existing terminals. Like Apple Pay, NFC-based mobile payments are also possible on Samsung Pay.
The fact that there has been little public reaction to Apple Pay in the U.S. after its rollout in Oct. 2014 gives a green light to Samsung. Even though Apple showcased its mobile payment service a year earlier than Samsung, Apple Pay is widely acknowledged to have failed to dominate the market, arising from the distribution of NFC-enabled terminals and transaction fees. Since there is no dominant power in the market, the Korean tech company anticipates that it will be able to overcome its shortcomings as a latecomer pretty soon.