Samsung Pay Has the Upper Hand Compared to its Closest Competitors

Ever since the NFC technology arrived in the market, consumers were promised by big brand plastic card providers that soon they would be able to pay without handing their card to a third person in the retail store.

Although there have been some major development on that front, the promised “tap-to-pay” method without reaching for your wallet is yet to be fully materialized in the payment industry.

Over the few years, a lot of large technology companies have entered the payment industry, including Apple Pay and Android Pay. However, Samsung Pay is the latest one to enter the US payment processing industry and it is offering consumers something truly special under its hood.

The key difference between how Samsung Pay works compared to its major competitors is the technology used. Samsung Pay uses a new technology developed by LoopPay, called magnetic secure transmission (MST).

LoopPay described MST as something that “generates changing magnetic fields over a very short period of time.” “This is accomplished by putting alternating current through an inductive loop, which can then be received by the magnetic read head of the credit card reader. The signal received from the device emulates the same magnetic field change as a mag stripe card when swiped across the same read head,” they added.

However, the “contactless” part of the MST is same as NFC, as it “works within a 3-inch distance from the read head.”

The most interesting thing about MST is the use of magnetic field, which makes it backwards compatible with around 80% of the old school plastic card readers in the United States. Hence, there is a good chance that you can easily use Samsung Pay with any local retailer as well without waiting for most merchants to upgrade their payment terminals.

One of the biggest drawbacks of Samsung Pay is that it only supports certain Samsung phones and the list is indeed petty small. Currently, only Galaxy S6, Galaxy S6 Edge, Galaxy Note 5, and Galaxy S6 Edge+ phones support the Samsung Pay. But, Apple Pay is also only available to newer Apple smartphones as well.

The newest players in the payment industry seem to be offering a payment service that only their devices support. This way, they can easily retain customers over the long run.