Mobile payments are getting a considerable traction since Apple launched Apple Pay in late 2014 and Google introduced Android Pay in September 2015. Both services are becoming popular in the United States and the United Kingdom.
Large banks and major merchants in UK and US have expressed support for mobile payment services and consumers are quick to jump in the trend. The popularity and necessity of smartphones will certainly drive the demand for mobile payments in other countries.
Android Pay is the Android counterpart of Apple Pay for iPhone. This is obvious. But Samsung has also introduced its own brand of mobile payment—the Samsung Pay. The company launched this in South Korea in August 2015 with further expansions in other countries in 2016.
Samsung Pay is an exclusive feature found in top-tier Samsung smartphones. The Samsung S6 and S6 Edge are the first devices to support this feature.
How does Apple Pay and Android Pay work?
Both Apple Pay and Android Pay are mobile payment and digital wallet service and features that let users make payment using their iPhone or other compatible Apple devices or compatible Android devices. They work by digitising credit card or debit card details and let devices make payments at contactless point-of-sales terminals. They effectively replace traditional card payment transaction using chip and PIN or magnetic stripe swipe at point-of-sale terminals.
Near field communication or NFC technology is at the heart of Apple Pay and Android Pay. This means that both mobile payment service works by establishing a wireless communication with another NFC-enabled device. In other words, Apple Pay and Android Pay only work when paired with an NFC-enabled contactless point-of-sales terminal.
When making payments using either Apple Pay or Android Pay, the enabled device wirelessly communicate with an NFC POS terminal and transmit pertinent information. Note that both mobile payment services keep payment information, such as credit or debit card number and details, private from the merchants
Dependency on NFC-enabled POS terminals is a considerable disadvantage of Apple Pay and Android Pay. Most merchants are still using dated POS terminals based on magnetic stripe readers. This is especially true for small retailers such as a community convenience store and restaurants.
The aforementioned disadvantage is where Samsung Pay comes into the picture. In fact, this disadvantage is the primary reason why Samsung Pay is better than Apple Pay and Android Pay.
Advantage of Samsung Pay over Apple Pay and Android Pay
Both Apple Pay and Android Pay are relatively the same because of their use of NFC technology. Samsung Pay also uses NFC technology. Enabled Samsung devices are able to make mobile payments by wirelessly communicating to an NFC-enabled POS terminal.
When further pitted against Samsung Pay however, both Apple Pay and Android Pay fail in comparison. Samsung Pay does not only use NFC technology. It also uses a technology called magnetic secure transmission or MST. This is the advantage of Samsung Pay over Apple Pay and Android Pay.
MST technology is the reason why Samsung Pay is better than Apple Pay and Android Pay. MST allows enabled Samsung devices to make mobile payment at chip or swipe POS terminals or those old POS terminals that use magnetic stripe readers.
The technology essentially and theoretically turns existing mag stripe-reading point-of-sales terminals into contactless readers without any hardware modification. MST works by generating changing magnetic fields over a very short period by putting alternating current through an inductive loop.
Note that the magnetic read head of mag stripe readers can read these magnetic fields. Furthermore, the signal received by a mag stripe reader is similar with the same magnetic field change induced by swiping a mag stripe credit or debit card across the same read head.
To illustrate better, in absence of an NFC-enabled POS terminal, a Samsung Pay user only needs to hold his or her enabled Samsung device about three inches near the read head of an existing mag stripe POS terminal.
Wireless communication through magnetic secure transmission makes Samsung Pay almost universal because of a higher degree of merchant compatibility compared to Apple Pay and Android Pay. Merchants do not need to purchase and replace NFC-enabled contactless POS terminals to accept payments made via Samsung Pay.
In a nutshell, the advantage of Samsung Pay over Apple Pay and Android Pay is that it works with almost all existing POS terminals, whether they are mag stripe readers or NFC-enabled contactless terminals because it comes equipped with both NFC and MST technologies.
Limitations and other disadvantages of Samsung Pay
It is important to note that magnetic secure transmission has several disadvantages including a tricky way of positioning an enabled device so that it can properly communicate with the read head of a mag stripe POS terminal.
Another disadvantage of Samsung Pay is that this service and feature is only limited to high-end Samsung devices. Only a handful of people could take advantage of MST because not all Samsung smartphones come with this technology. This fact makes Apple Pay and Android Pay more universal because of wider availability.
Lack of awareness on the part of merchants or POS attendants is another disadvantage of Samsung Pay. Those who are not familiar with MST technology could easily shrug off a consumer and say that their stores do not support mobile payments or NFC contactless payments.
There is also a concern over possible obsolescence. MST might become useless in the future because banks and merchants are slowly gearing toward contactless payments by adapting contactless POS terminals. This is because mag strip POS terminals have become more vulnerable to identity theft and card fraud over the year. Of course, it is important to highlight the fact that Samsung Pay still supports NFC payment.