The official launch of Samsung Pay in the United States comes at only one month after the company has released a similar service in South Korea. From now on, this mobile transaction service is also available to clients all over North America.
However, one question arises: will Samsung achieve the success it wants? After Apple Pay was released last year and without the large coverage of Android Pay, can newer mobile payment services conquer the US market?
For now, Samsung Pay is only available on its latest devices: Galaxy Note 5, S6, S6 Plus and S6 Edge+. In addition, the company does not have a contract with Verizon, one of the major US mobile carriers, in order to permit the payment service on their system. Samsung Pay will only run on Sprint, AT&T, T-Mobile and US Mobile.
However, for bankcard services, the payment option works with both Visa and MasterCard, the main platforms in the US. Samsung Pay users need official approval from all card providers as well, and only users with cards at American Express, Citi, US Bank, Bank of America will use the new payment service.
The number of clients in America who will enjoy the benefits of Samsung Pay at release is rather small compared to its potential market. On the company’s mobile phones, its support will compete with the much larger Android Pay. This is Google’s second and more powerful mobile payment option app, after Google Wallet was released back in 2011
Apple Pay has already more than 500 financial institutions registered in its system. Even if official data has not been published yet by Samsung, its payment service probably has only 25 companies under permanent contract. This number is similar to the small scale on which Apple Pay was working right after its US release. A big obstacle for Samsung is represented by the restrictions imposed by financial institutions that do not support it, along with the absence of Verizon from its list of business partners.
But, it is still wrong to neglect Samsung Pay and its potential in the long term. This is because the secret to success for the South Korean giant is a technological innovation known as Magnetic Secure Transmission or MST. This element looks like the magnetic credit card that we all know so well.
Earlier this year, the company bought the smart system for $250 million from LoopPay, a small business that creates mobile components to store credit cards on electronic devices.
Samsung’s MST idea resolves an issue that is not a severe one at this time, since using a magnetic stripe is still an easy action for most people. This means that users will not choose to substitute a magnetic card with their own mobile phones while POS are found in the majority of stores.
Samsung’s new technology could beat Google’s and Apple’s similar payment services if we consider the number of devices that are potentially compatible with Samsung Pay. This advantage might offer the upper hand against its bigger, more established competitors at release.
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