The mobile payment wars are heating up -- and fast. On the heels of Google's move to essentially ditch its Wallet concept in favor of the new-and-improved Android Pay, Samsung is set to roll out Samsung Pay in the United States on September 28. The question is, which is better?
When JK Shin, CEO and head of IT & Mobile Communications at Samsung, announced the mobile payment system in March, he promised it would reinvent how people pay for goods and services and transform how they use their smartphones. But is it the "game-changing service" he promoted or purely hype.
Samsung is launching with major payment networks like MasterCard and Visa on board, but so is Android Pay, which Google started rolling out last week. Samsung Pay and Android Pay, in fact, both have strong and growing ecosystems with key financial partners like American Express, Bank of America, Citi, JPMorgan Chase, and U.S. Bank, to provide greater flexibility, access, and choice for customers while enabling simple and secure payment experiences.
Which Offers What?
“Mobile commerce just got a lot more interesting,” said Jim McCarthy, executive vice president of Visa, in a statement. He was talking about Samsung Pay's entrance into the mobile payment market, but this was before Google pushed out Android Pay. So, again, which service is better?
According to the company, Samsung Pay has the potential to be accepted at approximately 30 million merchant locations worldwide. Out of the gate, consumers with Android Pay installed on their smartphones can pay for goods at over 1 million locations in the U.S.
Google hasn't said anything about 30 million locations, but it has listed a slew of big brands that will support Android Pay and it seems to have covered all the initial bases. Beyond making digital payments, Android Pay even stores gift cards, loyalty cards and special offers on users' mobile devices. In the days ahead, Google has vowed to add more features, as well as banks and store locations, to make Android Pay even more useful.
Samsung hasn't mentioned those capabilities, though it does boast a technology called Magnetic Secure Transmission (MST). Consumers can use Samsung Pay in merchant locations regardless of whether the terminals support NFC or traditional magnetic stripe technology, which is supported by the vast majority of existing terminals.
One Huge Difference
We caught up with Greg Sterling, vice president of strategy and insights at the Local Search Association, to get his thoughts on the competing Android-powered smartphone mobile payment systems. He told us there is one big difference.
"Samsung Pay includes [the MST] technology, acquired when it bought a company called LoopPay that doesn't require an NFC-enabled terminal to work, Sterling said. "It's compatible with a far greater number of in-store point-of-sale systems than Apple Pay and Android Pay are today."
While Samsung has this competitive differentiator, it's not lacking in the capabilities that Google Pay, as well as Apple Pay, currently offer. Sterling pointed out, for example, that Samsung Pay will also offer thumbprint recognition, like its rivals.
"We'll have to see how easy is it to use in practice and how it lines up against the Android Pay experience," Sterling said. "It could turn out that Android users rely on the Google system in some situations and Samsung Pay in others where NFC technology is not available."