It’s official, Apple Pay’s competitor has launched its service in Australia. Samsung Pay works on a range of different smartphones including the Samsung Galaxy S6, Galaxy S6 edge, Galaxy S6 edge+, Galaxy Note 5, Galaxy S7 and Galaxy S7 edge. Due to the service being available on multiple devices, it has the potential to become the countries leading contactless payments system.
Samsung Pay wants to take things a little further with intentions of replacing the cards that we hold in our wallets for all manor of payments, e.g. gym, loyalty, library and even public transport cards. During its Australian launch event Samsung hinted at the idea that it was working on technology that would hopefully replace the Opal or Myki card too, but for this we will have to wait and see.
Australia is the 5th country to receive Samsung’s mobile pay technology after the system was first launched in South Korea last August. Since then it has been launched in the United States, China and very recently in Spain as well. The launch partners of Samsung Pay are Citibank and American Express, plus two co-branded cards called David Jones Amex and Emirates Citi World MasterCard.
The Samsung Pay system adopts an open engagement model which is designed to support a host of payment and non-payment cards from a variety of providers. Creating an open plan business model enables Samsung Pay Australia to operate seamlessly with the range of different partners, systems and payment channels that exist in Australia.
The company also took the opportunity at the launch event to boast that its system is the most widely accepted smartphone payment technology that is used across the globe. How the service differs from Apple Pay and Android Pay, which both use NFC (Near Field Communication), is that Samsung Pay also uses Magnetic Secure Transactions technology too (MST). This technology basically replicates the magnetic strip on a credit card and means that every terminal can support it.
The benefit of the MST is that it enables Samsung Pay to support a wider range of partners compared to Apple Pay and Android Pay because besides credit cards, most other cards and their readers use a magnetic strip as found on gift cards, gym cards and loyalty cards for example.
Elle Kim, Samsung Pay’s global Vice President said within the launch that in less than six months of the service launching in South Korea and the United States of America, Samsung Pay surpassed 5 million registered users and to date has already processed more than US$1 Billion worth of transactions in Korea alone.
Samsung say it’s their goal to one day replace wallets by making every card accessible on Samsung smartphones. The company believes that in a country like Australia where a large proportion of the population already use smartphone payments, it will help bring increased benefits through allowing all cards to be used via Samsung Pay. The convenience is one of the services unique selling points.
When using Samsung Pay as a means of paying for your bills, there are three different types of security which include fingerprints and/or a 4-digit pin, tokenisation and proprietary software Knox. This security software scans to check your security and has the ability to permanently disable Samsung Pay if it notices a compromised device.
The payment process is basic too. Simply swipe up to choose the card that you would like to use, authenticate the transaction with your fingerprint sensor and tap the phone against the point of sale device to complete payment. The great thing is that Samsung Pay can also be used in offline mode.
Android Pay would also work on Samsung devices, however it is not yet available in Australia despite the fact that Google announced its arrival could be expected within the first half of 2016. There is another challenge that both Apple Pay and Samsung Pay will face as they expand across Australia...which of the big 4 banks will also be trying to seize the market with their own apps. In April, Apple did manage to sign with ANZ so we will have to wait and see how the market reacts in due course.
To put things into context and help you understand the scale at which Samsung Pay could grow, we simply have to look at the smartphone landscape in Australia. Android devices have roughly 60% of the Australian market, whilst Apple devices only have a 35% share.
Samsung Pay has the potential to build greater brand loyalty for its customers and therefore prevent them from switching to other Android devices. However, if its going to successfully take over the market, it needs to partner with the big four banks in a similar way to what Apple did recently with ANZ.