This week Samsung announced “Samsung Pay” as coming to their smartphones. Presumably as a competitor to Apple Pay, but more realistically it will end up competing against Google Wallet. Will people forgo their iPhones or non-Samsung Android phones to flock to Samsung Pay? I’m doubtful. Supposedly the advantage of Samsung Pay is that it can mimic a card swipe. Fine, but that may also end up being a security nightmare waiting to happen.
Unlike Apple Pay and Android Pay, Samsung Pay supports not just NFC for retail transactions but also a separate wireless technology — acquired via the takeover of LoopPay — that can mimic a card swipe. That should give Samsung Pay a leg up when it comes to merchant acceptance, as merchants will not be forced to upgrade their payment terminals to work with NFC in order to accept Samsung Pay.
To use Samsung Pay, users choose the card they want to use, authenticate with a fingerprint scan, then tap their device on the appropriate spot on a terminal. Samsung is relying on tokenized transactions to prevent stolen data and fraud.
Moreoever, doesn’t this just encourage further fragmentation in the Android phone payment space? Color me very skeptical on this product/service.