Samsung announced yesterday (July 16) the launch of a trial service of its mobile payment solution Samsung Pay for select customers in Korea, in preparation for the official rollout expected later this year.
Korean customers using Samsung Galaxy S6 and S6 edge mobile devices will be the first to have access to the new digital payment app, the company said in a blog post, adding that Samsung Pay will be the most widely accepted mobile payment service in stores throughout Korea.
According to Samsung, the technology available in Samsung Pay works with both near field communication (NFC) as well as traditional magnetic stripe card readers. This compatibility puts Samsung Pay in a good position with merchants because they will not have to upgrade payment terminals in order to accept contactless payments, which may see Samsung Pay being used in even more stores, VentureBeat reported.
Samsung Pay’s ability to work with older card technology is a product of the company’s recent $250 million acquisition of LoopPay, a mobile commerce platform that uses its magnetic secure transmission (MST) patented technology to turn existing mag stripe readers into mobile contactless receivers by wirelessly transmitting data stored on a debit or credit card’s magnetic stripe to a merchant’s terminal system.
Samsung’s acquisition of the company has been widely seen as a bid to fire a shot across Apple’s bow, by launching an Apple Pay competitor.
To get started with Samsung Pay, users first add various card payments into the app then launch the app, hold the device near the credit card terminal and use their fingerprint to authorize the payment. Card information is kept secure through the use of tokenization technology.
A full launch of Samsung Pay is first coming to the U.S. and South Korea, with a global expansion to follow after, VentureBeat said.
But just last month the company announced a surprising delay to the launch of its mobile payments solution. What was supposed to be a summer 2015 rollout is now slated for September.
MPD CEO Karen Webster caught up with Will Graylin, Global Co-GM of Samsung Pay and CEO of LoopPay, about just what was behind the decision to push back the Samsung Pay release.
“The delay of launch is not because of any softness on Samsung’s commitment or capabilities to get the product out,” Graylin told Webster in an exclusive interview shortly after the delay was announced. Graylin noted that the delay was pushed back to a key month for Samsung: September — which is when the introduction of Samsung’s next “flagship” smartphone product can be expected.
“If anything, we think that by the time we launch [in September], that we will have significant announcements associated with which banks, which networks are participating with Samsung Pay and even which merchants and which programs attached to merchants will all be a part of Samsung Pay,” Graylin said.
“And that’s just a slight hint into what will be coming. Samsung Pay is in a great position” he added.