Samsung Pay overview: countries, banks and how Samsung's mobile payment works


Paying with a smartphone has been a sci-fi dream that's become a reality for most Americans in 2015, and in 2016 the scope of phone payments will only grow.

It was Apple who was first with a true mass-market system that would be used by millions of people with the NFC-based Apple Pay in late 2014. Google who had tried years beforehand with Google Wallet, lacked the scale and widespread adoption of Apple Pay. The company finally became serious about mobile payments in late 2015 when it unveiled Android Pay, another NFC-based mobile payment solution that had the benefit of working with older phones, even ones running Android 4.4 KitKat.

There is, however, one other company that has grand ambitions with its payment system: Samsung.

Its service, Samsung Pay, has one key advantage over both Apple Pay and Android Pay: it works with traditional terminals that don't have a fancy NFC chip (a physical NFC chip is a requirement that a terminal should have in order to work with Apple and Android's solutions). In fact, Samsung Pay supports both magnetic transactions (used in traditional terminals) and NFC wireless transactions (requiring an upgraded terminal).


It's important to understand the implications of this: big retail chains like McDonalds, Subway, Walgreens, Duane Reade and the Whole Foods Market have NFC-enabled terminals, but your local store most certainly does not and even big names like Best Buy have not yet upgraded their terminals to have NFC. While Best Buy is on the list of retailers that will soon support NFC, it will probably take years for small, local stores to get the fancy new terminals. If that's where you do your shopping, Samsung Pay is the only solution that works at the moment.


Samsung Pay's ubiquity secret: a magnetic chip


So what is the magic component that allows Samsung Pay to work at those older terminals?

The secret sauce is a little magnetic coil built inside the latest Galaxy phones. This magnetic coil sends a signal that mimics the magnetic signal that the terminal would receive when you swipe your typical credit / debit card, basically fooling it to think that you have paid using the card. The whole process is called magnetic secure transmission (MST). 

The smart technology was developed by a company called LoopPay (a Massachusetts start-up acquired by Samsung for $250 million in February 2015), and Samsung has promised to bring it to not just its top-tier devices, but its more affordable phones as well in 2016.

Security


Okay, being able to pay almost everywhere with Samsung Pay is quite useful. But are those transactions secure?

There are two aspects to Samsung Pay security since it uses two different methods for payments: NFC and MST (magnetic). 

The security of NFC transactions has been discussed before, but put shortly, let's say that an NFC (Near-Field Communication) transaction happens between two devices (a terminal and a phone in our case) that both have an NFC chip installed. NFC uses less energy than Bluetooth and authorization happens easier and in an instance. There are two key pieces to NFC transactions security: tokenization (rather than transmitting actual card numbers, what's transferred are encrypted tokens, so it's impossible to snoop on sensitive data) and the secure element. The Secure Element (SE) is a separate chip built inside the phone. It is different than other chips not in just function - it is designed to be physically resistant to malicious hackers. Each time a user starts a transaction, the SE assists in generating a random, one-time use code rather actual card numbers.

The understand the security aspect of MST transactions, one has to understand how MST works. The magic happens in the following way: the magnetic coil inside your Galaxy phone runs alternating currents through an inductive loop and generates a dynamic magnetic field. Terminals aka card stripe readers will read this magnetic field if your device is within 3-inch distance. This exact magnetic field contains your payment information. The fact that it works over just 3-inch distance means that a potential hacker has to operate within this incredible proximity to attempt to steal money, which alone is reassuring that payments are secure.

Supported Devices


We've already seen that Samsung Pay only works on top tier Samsung devices (Galaxy S6 and Note 5 family member), but what about wearables?

Apple Pay is already supported on the Apple Watch, but both Android Wear devices and Samsung's Gear smartwatches are lagging behind. Luckily, Samsung has promised that its Gear smartwatches will get support for Samsung Pay in early 2016 and that would be a nifty time-saver.

Samsung Pay in the United States: Supported banks and carriers


Samsung Pay launched on all major US carriers sans Verizon Wireless at first, but by November 2015, Verizon had also joined in, so now the service is supported on all of the big four operators.

Not all banks, however, would support Samsung Pay with their credit / debit cards just yet. There are 6 big names that do support it: Bank of America, Citi, Chase, US Bank, American Express, and PNC, while for the fine details and if you want to check whether your financial institution supports Samsung Pay, make sure to go to Samsung's official page with those details.

Samsung Pay goes global in 2016


Samsung Pay launched first in Korea in the summer of 2015, but its biggest test-bed was certainly the United States. Samsung opened the proverbial doors to its payment system on September 28th, 2015.

With its combination of NFC and MST payments, for many users it is the most practical mobile payment solution: one that works in more than 90% of cases.

Is all of that ever going to spread to the rest of the world, though? Good news is that Samsung will light up the first key markets outside the US in 2016. Samsung officials have said that Pay is coming to the UK by August 2016. 

Samsung has also signed a key agreement to launch payments in China by the end of Q1 2016 (Apple Pay is about to debut there at the same time). Spain is also in the plans for Q1, while Australia, Brasil, and Singapore are in the roadmap for 2016.

FEATURED VIDEO

62 Comments

1. Unordinary unregistered

Needs to keep adding waaaaaay more banks and cards, otherwise this nice tech will just keep being a waste and a joke. Step it up Samsung.

3. tedkord

Posts: 17311; Member since: Jun 17, 2009

It's neither a waste, nor a joke. It's the best implementation of pay by phone on the market.

6. Mxyzptlk unregistered

It is when only a few banks support it.

8. tedkord

Posts: 17311; Member since: Jun 17, 2009

You have a choice of only a few banks supporting it with Samsung Pay or only a few retailers supporting it with Apple/Android Pay. How is one more of a joke than the other? What I know is that any Apple user can use his iPhone to pay at roughly 1/10th the places I can. Since I'm the one laughing,I know where the joke is. Best implementation available.

16. Hexa-core

Posts: 2131; Member since: Aug 11, 2015

Right! Thanks for shutting that iTroll up. Go, go Sammy! #NextIsNow

34. Unordinary unregistered

Idk where you dinosaurs live, but most places have NFC terminals now a days. The U.K. has had them for 10 year and is getting rid of swipe terminals day by day. The US is late, but is added terminals all over. Maybe you live in Nebraska? Stop defending a bad move by Samsung and start sending letter asking to have more banks support them and more cards on SP since you think it's all godly and what not. Lmao.

36. joevsyou

Posts: 1091; Member since: Feb 28, 2015

welcome to u.s.a where we just started to require chips in credit cards for security while over in Europe where it has been for YEARS

38. ph00ny

Posts: 2026; Member since: May 26, 2011

Not really the case in US and i've only lived in major cities

40. NoToFanboys

Posts: 3231; Member since: Oct 03, 2015

"but most places have NFC terminals now a days" you forgot to add "in my country"

44. tedkord

Posts: 17311; Member since: Jun 17, 2009

No bad move. I live outside Philadelphia, and very few places have NFC. By their own numbers, I can use my Samsung Pay at about 9 times as many places as Apple Pay.. You don't have to like it, you busy have to live with it.

53. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

NO they do not. That is a lie. If your claim is true fool. Look at the numbers fool. Do the math fool. If Apple Pay only works at 10% of retailers and businesses that accept credit cards, HOW IS THAT MOST PLACES HAVE NFC. YOPU ARE A STUPID IDIOT. 10% 10% 10% Do I need to do more math for you. if I needed $100 from you and all you could give me was .10 on a dollar each time, that means it is goign to take you longer to giuve me $100 vs a person who is giving me $.90cents each time. Do you even understand how math works. If Samsung Pay works at 90% of business and Apple Pay works at only 10%...the total is a full 100% Who has the most dummy? I think you are so stupid, that ypu just liek to argue and start a fight that you lost with the first punch. Dude 90% is BIGGER THAN 10%. Maybe in Europe NFC may be a huge deal, but I still can use Samsung Pay more fool because Samsung Pay works with both. Which means potential I could use Samsung Pay at 100% of retailers because I can use Samsung pay at Apple's 10% because those NFC readers will also accept MST and if they dont I simply switch to NFC. You ever seen Toy Story? You remember the seen at the gas station when Woody screamed at Buzz telling him..."YOU ARE A TOY"? Well I am tell you..."YOU ARE A FOOL" Please tell me how can 10% be the majority when its smaller than 90%. We are talking global usage sir...not country specific. Because here in the USA, the only few retail location I have seen who do accept NFC is Walgreen's and McDonald's. Both of those locations work with Samsung Pay. I'm done with you because you can't explain logic and common sense to someone who lacks it. Its liek trying to explain to a blind man, who has been blind since birth, the color or grass. There is no way you can explain it to him. EVER! That's how ignorant you're acting...or maybe it isn't an act.

52. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

Thanks you. Lets stop commenting to these stupid fanbois who have as much logic in their thinking as a worm. That cant see their hand in front of there face, even in bright lights. if you are driving a car with a Natural Gas buring engine. Why would it matter if you past 10 gas stations and can only fuel up at 2 vs my car uses unleaded and I can go to all of them except the 2 that only have natural gas only? He is a foolish little child. I hope he doesnt have money, because I could take all of from him because he doesn't seem to understand simple math. being with more banks is not an advantage. The advantage is being with the biggest banks first which has the potential for more users and worry about all those little neighborhood banks. Supporting debits cards isnt as good a benefit as support Discover, AMEX, Visa Bank and Mastercard Bank.

51. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

What gopod is more banks and no place to use it dummy? That's liek saying, well I save all this money and now I have nowhere to spend it because you are sitting in a desert. NFC is like a pond in a desert. Yes there is water, but its no good if you cant find it. Looks at the numbers dummy. 9 or of 10 retailers can accept Samsung Pay. with users from Citi and Chase alone you can have more users using it over Apple Pay. What good would 100 ATM machines in a single location be, if your phone for example can only work with 10 of them vs my phone can work with 90 of them? You are an idiot! NFC = Aceeptance Problem MST = Banks on board problem. Both have an equal problem with acceptance as far as one having the benefit of more banks and the other having the benefit of being used in more places. Having a larger degree of acceptance is better than just having more banks. If you can't see that, than you are simply stupid and really need to go to some type of logic school. Because you have no logic because you're to busy being a stupid fanboi. In one city like Chicago in a single square mile could be over 100 locations that you could potentially use mobile payments. What good is having all your cards on yoru phone if you are only goign to get to use it maybe at 20 locations. For me I dont have to rely on a bankcard. This is what you dont get. Most people have at least one debit card. Yes if Samsung Pay worked with every debit card it would be great. But what you dont get is if you have an AMEX alone, AMEX is accepted at 90% of retailers. Which means 9 times out of 10 I can use my Samsung Pay. Yet you may have all 5 bancards in yoru Samsung Pay and you wont even get to use it often and you are forced to always take your backcards. I NEVER TAKE MY BANKCARD ANYWHERE ANYMORE. I take my phone, my drivers license and my AMEX card just in case. Other than gas, I rarely have an issue using Samsung Pay. I bet yesterday alone I use my Samsung Pay more than you did Apple pay. In fact, in one hour I bet I used Samsung Pay more than you could use Apple Pay in a full 24 hour day.

23. andrewkb

Posts: 24; Member since: Jan 04, 2016

the problem isnt samsungs fault. its banks that need to make the system work. when you get samsung pay it makes a new digital card similar to yours yet different. the card has its own magnetic code and a different number and pin. so the banks need to support digital cards

30. Hexa-core

Posts: 2131; Member since: Aug 11, 2015

That's what haters do not get.

37. Jimrod

Posts: 1605; Member since: Sep 22, 2014

What haters? I don't know anyone who hates Samsung, all the hate comes FROM the Samsung/Android side it seems though.

45. tedkord

Posts: 17311; Member since: Jun 17, 2009

As a hater, it's natural that you don't see it, but imagine it's all from the other side.

54. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

That's a lie.

35. joevsyou

Posts: 1091; Member since: Feb 28, 2015

yup!, discover is my main credit card and it's been like 6 months since they announced they will support Samsung pay and yet still no where to be found.

50. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

It's not a joke now. Samsung Pay has way for usage. Even though Apple has more banks, they have an acceptance issue because 10% or les sof retailers have compatible terminals. while Samsung Pay can work with 90% and simply has the banks on board issue with is the opposite. But since Samsung likely sold over 80M phones with the combined sales of all the S6 models and the Note 5, at least in the USA, where Samsung could have sold well over 50M phones, that means 50M people can use Samsung Pay. With Chase alone is enough people to use Samsung pay, providing they have a Smasung phone. However here is how Samsung can solve the issue with Banks. All Samsung needs is a way for the system to acceptance any bancard that has a Visa or Mastercard logo no matter which bank issued it. After all, that bank is issuing a card based on permission given from Visa/MC. Just like any ATM can accept a Visa/MC no matter which bank issued it, Samsung needs this too. if they do that, its over for any other payment system as far as usage numbers. I am willign to bet right, I have use Samsung Pay more times, that the combined Apple Pay usage of at least 10 users. Because I can use Samsung Pay with 9 out of 10 retailers, while Apple Pay wont work at 8 out of 10 retailers. Yesterday was one of the few times I went to a location and it didnt work. It was at Sbarro and even though it did notice I used a mobile pay system, it error out. So far that makes obnly 2 places I have gone and it didnt work. I have gotten to a point I carry just an ID and my AMEX as a backup in the case I can use Samsung Pay which the only place I havent been able to use it often is at the gas pump, but I can go inside and pay with it. Its not a joke. You're a joke because you are such a bias person who is so closed minded. Why dont you try using it and dont worry about a problem that has no effect on you. What good is more banks if your system still doesnt work @ 90% of retailers/businesses? Please explain. Its like filling the tank in your car with diesel fuel and you suppose to use unleaded, an even though it is gas, the gas can't drive your car anywhere because its the wrong type. This is why Google Wallet never went anywhere because NFC has an acceptance problem. MST works with nearly any reader that you can swipe cards on. Which is nearly every terminal on the planet. While NFC requires a terminal with the chip and Samsung Pay works with both. I only use NFC with my phone once at a vending machine that accepted NFC.

61. HomerS

Posts: 419; Member since: Sep 19, 2014

It works with 42 banks and Android pay with 34 banks and that is not counting Korea.

2. tedkord

Posts: 17311; Member since: Jun 17, 2009

I get a kick out of the reactions when cashiers tell me it won't work because they don't have that kind of terminal, then it goes through. It's especially funny when an iPhone user behind me tries after.

5. Jimrod

Posts: 1605; Member since: Sep 22, 2014

Why are you hanging around at checkouts stalking the people who were shopping behind you? Weirdo.

7. Mxyzptlk unregistered

He has nothing better to do with his time.

10. tedkord

Posts: 17311; Member since: Jun 17, 2009

Awwww. Don't worry, I'm sure Apple will copy something else to make you feel better.

11. Jimrod

Posts: 1605; Member since: Sep 22, 2014

Great response, bravo. It does sound a little sad and desperate though. Truth is you're talking crap, making up scenarios to big up your fanboy brand and diminish the trendy target for hate. Maybe that's the point, I have an iPhone, I've used it many times in the UK for paying for shopping, never thought to check if it's accepted as it's just worked wherever contactless pay is accepted. The difference being that I pick up my shopping and go home, like most Apple users I imagine. We're a simple bunch, as you guys keep telling us. I don't feel the need to hang around once I've bought my shopping and spy on other people doing theirs, strange I know.

12. tedkord

Posts: 17311; Member since: Jun 17, 2009

I don't "hang around", tard. I buy a soda, pay. The guy behind me does the same. It takes seconds. But I guess I shouldn't expect much from a guy who can't even tell which response was to him.

15. Jimrod

Posts: 1605; Member since: Sep 22, 2014

I responded to your post, I don't care who that post was aimed at. Should I? Is thread timeline OCD another stalker trait?

17. tedkord

Posts: 17311; Member since: Jun 17, 2009

You responded because you thought it was directed to you.

19. Jimrod

Posts: 1605; Member since: Sep 22, 2014

...do not care. The reply remains the same. Think I should make a second account to instantly give me a "green thumb" on every comment like you have? Or is it your little sidekick Hexa-core doing that? And they call iPhone users sheep...

Latest Stories

This copy is for your personal, non-commercial use only. You can order presentation-ready copies for distribution to your colleagues, clients or customers at https://www.parsintl.com/phonearena or use the Reprints & Permissions tool that appears at the bottom of each web page. Visit https://www.parsintl.com/ for samples and additional information.