Samsung Pay launched today in Australia allowing American Express and Citibank card holders to make in-store purchases with their Samsung smartphones.
The service is already available in South Korea, the US, China and Spain and will be launched in Singapore tomorrow. The UK, Canada and Brazil will follow later this year.
To make a payment, users swipe up on their phones, select their chosen card, authenticate with a fingerprint sensor and tap their device on the point of sale terminal. Samsung Pay is compatible with both Near Field Communication (NFC) ‘tap and pay’ terminals and those with a magnetic stripe reader via Samsung’s proprietary technology - Magnetic Secure Transmission.
A similar service from Google, Android Pay, will be available to Australians later this year.
Unlike Samsung's offering, the Google and Apple systems do not do not have magnetic stripe compatibility, which is made possible by a magnetic coil built into new handsets from the vendor.
“We want to keep adding features,” said Elle Kim, global vice president, Samsung Pay. “I think if all we do is tap, people will think – ‘well my card is better’. So we continue to innovate and bring more value to consumers.”
Additional features in the pipeline include gift cards, loyalty and membership cards, cardless cash from ATMs and online payments. The company will also be trialing the technology as a way of paying for transit.
Banks not competitors
ANZ, CBA, Westpac and NAB all offer apps that have support for mobile payments.
Samsung said that it didn’t want to be a competitor to banks.
“We will complement their business model. We don't charge them any fees and we do not retain any data," said Prasad Gokhale, vice president, mobile division, Samsung Australia. “Our partnership strategy is to work with our banking partners not to compete with them. We will look for ways to work together.”
The company said it was their long-term goal to “make every card accessible on Samsung smartphones”.
“That’s critical for us and that’s critical to the success of this product,” said Kim.
“We have to figure out complementary use cases so that we don’t make [bank apps] obsolete so somehow users get what they need from both places,” said Kim. “We want to go beyond what banking does for consumers. People will still go to their banking app to do their banking.”
In South Korea, all major banks partnered with Samsung Pay on launch six months ago. So far Samsung has processed more than US$1billion of transactions there.