Apple vs Samsung and the Mobile Pay Battle
By George Rosenthal
First it was the launch of Apple Pay. Then Facebook announced the option to send money to friends by Messenger. Now here comes Samsung Pay.
Samsung’s goal is to grab its share of a reported $50 billion mobile pay market that is expected to grow to $142 billion in four years.
According to reports the new Samsung Pay will be similar to Apple Pay. Both will support NFC-enabled payments, a sort of industry standard that allows two devices placed within a few centimeters of each other to exchange data. In order for this to work, both devices must be equipped with an NFC chip.
Samsung users will be able to use the fingerprint sensor on the Galaxy S6 to authorize transactions. Samsung’s process may require a few more steps than that of Apple however. Apple Pay only requires customers to tap their iPhone on the terminal and touch their finger to the TouchID sensor to complete the process.
Overall is there really a difference? Samsung is said to support point of sale terminals used for older magnetic strip credit cards. This is through a technology called magnetic secure transmission or MST. The technology generates magnetic fields to mimic credit card swipes.
MST may not make much of a difference in the U.S. Here retailers are hurrying to comply with existing rules to change their PoS terminals to accommodate more secure chip-and-PIN credit cards.
These new terminals will also support NFC, which means all retailers will have the required machinery needed to support Apple Pay before the year's end.
Where Samsung does have a presumed advantage is in developing countries. While developed nations are moving to chip-and-PIN technology, retailers in emerging markets are not likely to upgrade to NFC terminals. In those countries consumers still widely use the magnetic strip cards.
And while Apple Pay is supported by only 200,000 merchants in the U.S., Samsung is claiming that 30 million merchants will be able to accept Samsung Pay payments at launch. Customers will still need a new Samsung Galaxy S6 though to make it work.
What may change the game is a new fingerprint mobile payment service Samsung has just announced.
The service will first be rolled out in South Korea and then is expected to be launched internationally.
This biometrics authentication solution has received certification from the Fast IDentity Online (FIDO) Alliance, an international standard setter for online authentication, which will allow it to expand the business globally. The certification is called FIDO Ready.
The FIDO Alliance has around 190 members, including Samsung, Google, Microsoft, Visa, and PayPal.
While much hype has surrounded mobile pay services in the past few months the service has many limitations.
Apple Pay is only available if you have an iPhone 6. The same holds true for Samsung where the previously mentioned Galaxy S6 is needed to complete transactions.
A report by InfoScout and PYMNTS.com published in TechCrunch, https://techcrunch.com/2015/04/19/the-year-of-mobile-payments/#.su0xax:4ZJq, revealed in March that 85% of iPhone 6 users still have never tried Apple Pay. Not exactly a ringing endorsement.
Still the market for this technology remains huge. It opens the door for more advanced applications like biometrics and will no doubt get more traction as the battle for mobile pay supremacy heats up.