Mobile payment is still to become mainstream and big tech names are working hard to make it happen. Rivals Samsung and Apple are at the tip of the spear with their mobile payment systems - and Google is also there with Android Pay. What they all have in common is that they intend to replace your credit cards in some situations. However, they all have limitations, although Samsung's offering has fewer. While Android and Apple Pay use NFC to make payments on NFC-enabled terminals, Samsung Pay comes with an exclusive magnetic secure transmission (MST) technology that mimics when you swipe your card, allowing it to be accepted in almost any existing system.
Samsung has great plans for its payment system, and a recent report from Business Korea gives us a light of what we can have in the near future. While today users can make payments in stores, the technology may allow for direct payments and money transfers between smartphones. In order for it to work, a special smartphone module would be required and a U.S.-based startup has filed a patent application regarding a technology that reads Samsung Pay payments through a special app. The implications are huge, as more than allowing person-to-person payments, it would make any Samsung Pay-enabled smartphone a mobile payment terminal without the need of a third-party value-added network (VAN). Since these VANs usually charge the merchant for each transaction, Samsung Pay could present a serious competition because it would remove these chargers making credit card acceptance cheaper for smaller merchants or individual people selling in events, for example.
Samsung didn't comment on the matter as the company is currently busy deploying the payment system across the U.S. and Korea. With more than 1 million subscribers and $88 million in payments already processed as of October, more markets are set to receive Samsung Pay in the next few months. Company executives are already in talks with Chinese representatives to enter the largest consumer market in the world, and the U.K. and Spain are also in the plans for a next rollout. While the system is currently limited to Samsung's flagship phones, there are reports that the company will be bundling the MST chip on mid-range smartphones as well, making it possible for a larger audience to make payments using Pay. Samsung also considered letting other manufacturers to use the system, but it was put on hold for now as they are busy with the deployment (again).