Samsung reveals Apple Pay competitor 'Samsung Pay'

http://www.theguardian.com/technology/2015/mar/01/samsung-reveals-apple-pay-competitor-samsung-pay

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Samsung has announced “Samsung Pay”, a collaboration with MasterCard which sees the Korean firm make a renewed attempt to establish a footing the mobile payment market.

The feature will let MasterCard cardholders with a new Samsung Galaxy S6 make in-store transactions with their mobile phone, similar to existing mobile payment systems such as Google Wallet and Apple Pay.

But where those services use near-field communications (NFC) technology to make contactless payments in shops which have newer payment terminals, Samsung Pay is also compatible with older magnetic-stripe card terminals, according to MasterCard’s Ed McLaughlin, the company’s chief emerging payments officer.

The company has incorporated technology acquired from American start-up LoopPay to enable the backwards compatibility, which could prove an important factor in encouraging adoption in North America, where growth of newer chip-and-pin and contactless payment standards has been slower than in much of the rest of the world.

But the incorporation of LoopPay’s technology also means that Samsung Pay will initially be limited to the brand-new Samsung Galaxy S6, since it requires special hardware which isn’t present in earlier Samsung phones. Until LoopPay was acquired, this hardware requirement posed a difficult problem for the business, which had been forced to encourage users to purchase special phone cases or use a compatible key-fob accessory.

MasterCard’s McLaughlin said “This is an exciting time for payments. As consumers are increasingly relying on their mobile devices in their everyday lives, we are excited to work with an industry leader like Samsung to deliver new payment options to our cardholders around the world.”

Announced at Barcelona’s Mobile World Congress conference alongside the Galaxy S6 mobile phone, Samsung Pay is not the company’s first foray into mobile payments. At the same event last year, the company announced a collaboration with PayPal to build that firm’s payment technology into the Samsung Galaxy S5, then the newest Samsung mobile phone. The PayPal deal let users authenticate payments, both online and in-store, using the Galaxy S5’s fingerprint reader.

And before that, Samsung phones with NFC chips were compatible with Google Wallet, a mobile payment service which lets users of Android phones make contactless payments by hooking their credit and debit cards up to Google’s cloud services.

But the latest relaunch follows the entry of Apple into the mobile payment market, with the company’s Apple Pay technology. Apple Pay introduced little new to the market, but galvanised public interest in the technology and created space for competitors to promote their own efforts.