How does Samsung Pay work?
Samsung Pay is based on Near Field Communications (NFC) technology in smartphones to make the contactless payments. What sets Samsung Pay apart from Apple Pay is that the former also supports a Magnetic Secure Transmission (MST) technology, which enables it to work with PoS terminals that do not support NFC. Using electromagnetic field, the service mimics magnetic stripes on the PoS, ultimately doing away with the need to physically swipe the card. All customers need to do is wave the smartphone near the PoS terminal, and authenticate the payment. For Paytm transactions, it also supports QR-based payments.
To start using Samsung Pay, users to need to create Samsung Account ID, which is provided at the time of registration onto the device. Go to Settings > Accounts > Add Samsung Account. Then install the Samsung Pay application. Set up the application with necessary details. Users need to save their credit/debit card details such as card number, expiry date, and CVV. To authenticate the payment, users need to scan the fingerprint or entering a Samsung Pay PIN. Do note that your smartphone has to be updated with the latest Android software.
For those concerned about their privacy and security, Samsung says all the transactions taking place through Samsung Pay use a random token instead of the card number, which essentially means the actual card details aren’t shared while making the payment. Also, the preloaded Samsung KNOX feature allows constant monitoring for vulnerabilities. “Even if the phone is compromised, card information is still safely encrypted within a separate and secure data vault,” explains Samsung.
Samsung had launched the contactless payment service in South Korea in 2015. Samsung Pay is based on a technology developed by LoopPay, a startup company that Samsung acquired in February of the same year. Samsung Pay is currently available in more than 10 countries including the US, UK, and Brazil. While Samsung Pay in India only supports in-store transactions, the service in Korea allows users to make online store payments and also to withdraw money from select banks’ ATMs.
The launch of Samsung Pay in India comes at a time when the country is transitioning towards a cashless economy. Since demonetization of old currency notes, the Indian government has aggressively pushed digital payments in the country. The demonetization gave a golden opportunity to mobile wallet companies like to Paytm to expand their user base. Paytm reported 7 million transactions worth Rs 120 crore in a day. Since then, the government has launched multiple digital payment platforms like the UPI, Aadhar Pay, BHIM app, and even pushed USSD-based transactions for non-smartphone users.
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