Samsung Pay is here!

Samsung has released Samsung Pay to take on Apple Pay and Google Wallet thanks to a startup it has acquired - LoopPay. With LoopPay's technology, Samsung phones can now replicate the magnetic-strip pulses on plastic cards. The use of magnetic pulses mean that the phones are compatible with most merchants.

The user still needs to interact with the phone - tapping your finger on the fingerprint sensor to initate payment even if it's over NFC. I am hoping the authentication will be optional in the future for payments under $10.

With LoopPay's tech, Samsung (or Samsung pay I should say) will help get customers more comfortable with mobile payments and more merchants will adopt them too. As merchants see customers make such payments, they would be more inclined to upgrade their POS to NFC (esp. in the US).

Like Apple Pay, Samsung Pay is more secure than plastic. With both services, the merchant gets a substitute 16-digit card number stored on the phone. A verification token is created for each transaction, based in part on unique keys on the phone. Even if black hats obtain that substitute number by cracking the phone, they need the actual phone for the verification code (which can be done through cloning but it takes a noticeable amount of time to clone a phone).

I am upset that Samung has not released a new specification for mobile passes. Non bank-card passes that are Samsung Pay-enabled would have been so useful to consumers and marketers. Imagine having an events mobile pass that not only provides you with contextual and relevant information based on your location or what you are doing but allows you to do payment without having to opening another digital bank card. Heading to the gym? Pass notification shows up, displays map to nearest water bottle dispenser which is Samsung Pay compliant. Tap the phone, tap your finger on the home button for authentication, and voila. Samsung could have 'augmented' Passbook Passes by releasing a new mobile pass specification which would have been compliant Apple passes, That would have coerced Apple into creating a better feature-rich mobile pass standard. Nevertheless, Samsung Pay along with Apple Pay are paving the way for 2015 to become the year of mobile passes.

Google is also working on extending coverage of Google Wallet. Unlike Samsung Pay, Google Wallet will work on Android phones sold by other manufacturers. In the US, customers will have to choose between Samsung Pay or Google Wallet when they buy the phone. Those who tinker with technology can unlock the payment feature and use more than 1 wallet. Google Wallet is not available globally on phones and security-wise, it uses regular card numbers, without the added security from substitute numbers used by Apple Pay and Samsung Pay. Samsung may be onto something by offering a secure and almost unique feature on its phones, and it is working towards making Samsung Pay legally compliant internationally. All Hail Samsung and let's hope the company keeps innovating in the mobile payment space. 2015 is indeed the year of mobile passes!