Samsung Pay Pushes Back Launch, Adds Consumer Rewards Program (June 3, 2015)
Samsung Pay will roll out in September, a bit later than its originally planned summer 2015 launch. But when the m-payments service goes live in the U.S. and Korea, it will include a consumer rewards program, Samsung’s top mobile technologies executive told investors this week. The Korea-based handset manufacturer’s m-payment service takes a unique approach, using technology that LoopPay developed to enable contactless mobile payments with NFC-ready handsets at 90 percent of merchants’ POS locations, including those equipped only to accept magnetic stripe cards and those with NFC capabilities that haven’t yet switched on the feature.
Samsung in February acquired the patented Magnetic Secure Technology from startup LoopPay, and it’s built into all of Samsung’s Galaxy S6 and S6 Edge handsets. To pay with Samsung Pay, users will need to download an app and link payments cards to it. When paying, users will need to open the Samsung Pay app and tap it near any payment terminal. Analysts say Samsung Pay’s ability to enable contactless payments at the majority of U.S. merchant POS locations—most of which don’t yet support NFC—could provide a short-term advantage over Apple Pay and Android Pay, which each require NFC to be enabled in the handset and the payment terminal. Though only 10 percent to 15 percent of U.S. merchants currently have gone live with NFC, most are expected to convert their NFC-ready hardware to contactless readiness as mobile payments grow in popularity, Randy Vanderhoof, executive director of the Smart Card Alliance, forecasts.
Injong Rhee, Samsung’s executive vice president of mobile, reportedly told investors at the Samsung Electronics 2015 Investors Forum in Seoul this week that Samsung Pay will subsequently roll out in China, Europe, Australia and Latin America, though he didn’t specify timing for those markets. Samsung Pay will launch in the U.S. and Korea in conjunction with the release of the company’s next “high-end” phone model, Rhee said.
Rhee declined to discuss specifics of how Samsung Pay will generate revenue, but he said Samsung plans to return any profits the service generates to consumers via a loyalty program, according to NFC World. Rhee didn’t explain how rewards will be funded. As for whether Samsung plans to expand its m-payments service to other handset manufactures, Rhee suggested it’s a possibility. “We want to make sure the Samsung Pay solution will have market traction and then we’ll think about opening up to other manufacturers,” Rhee reportedly told investors.