Credit Card Processing

Introduction to Samsung Pay

by Ellen Cunningham

Samsung Pay is a digital wallet available from major electronics manufacturer Samsung.


What is Samsung Pay?

Samsung Pay is a digital wallet that can be used with Samsung Galaxy phones in models S6 and later. Users can add supported debit and credit cards to their Samsung Pay account and then pay for purchases using their Galaxy smartphone.

Samsung Pay homepage

When launched, Samsung Pay was compatible with Visa and MasterCard, as well as many debit cards. The company is also in the process of securing compatibility with American Express cards.

At different points in 2015, Samsung Pay has announced support for new cards to be accepted including those issued by Chase, PNC Bank, SunTrust, TD Bank, Navy Federal Credit Union, Fifth Third Bank, People’s United Bank, and more. Additionally, Samsung announced that it will be compatible with Discover cards sometime in 2016. The list above reflects anticipated card support only. Cards cannot be assumed compatible with Samsung Pay until officially announced. Skip down to what cards work with Samsung Pay for a current list of compatible cards.

In the summer of 2016, Samsung Pay claimed that user satisfaction is higher than that of rival Apple Pay. However, Apple Pay adoption still outpaces Samsung Pay. As Samsung Pay is the newer of the two technologies, it’s possible that some consumers aren’t aware of it yet, and that usage may still spike.

How does it work?

Samsung Pay utilizes both near field communication (NFC) technology and a new proprietary technology called Magnetic Secure Transmission (MST). If a payment terminal is unable to accept NFC or contactless payments, Samsung Pay will use magnetic stripe terminals as a backup.

NFC, also known as contactless technology, allows customers to pay for purchases by waving their compatible phone near a contactless payment reader. Not all businesses currently have payment terminals that support contactless payments.

MST technology emits a magnetic signal from the user’s smartphone, allowing the transaction to be processed through a traditional magnetic stripe terminal. The customer slides their phone over the magnetic stripe reader to pay. Almost all businesses that accept physical credit cards have terminals that support magnetic stripe payments.

The combination of NFC and MST technology means Samsung Pay can be accepted at virtually all businesses. This is in direct contrast to Apple Pay, which only uses NFC technology and can only be accepted at certain contactless terminals. However, many businesses are already upgraded terminals for the October 2015 EMV liability shift, and many of these upgraded terminals will also support contactless payments.

Whether Samsung Pay is used as NFC or MST, the payment is processed as a card-present transaction through your existing processor.

Related Article: Does the EMV liability shift affect your business?


Samsung Rewards

In November 2016, Samsung announced the launch of Samsung Rewards, a program with a goal of increasing Samsung Pay usage. With Samsung Rewards, customers that use Samsung Pay to make purchases will earn rewards points that can be redeemed for gift cards, Samsung products, and other items.

What cards work with Samsung Pay?

As of December 2015, Samsung Pay announced that it has recently added support for Chase Bank cards and for Navy Federal Credit Union credit and debit cards. These two additions join the growing list of options supported by Samsung Pay that includes Visa, MasterCard, and American Express cards issued by Bank of America, Citi, US Bank, Synchrony Financial, and SunTrust.

In March 2016, Samsung Pay has added support for Wells Fargo credit and debit cards.

In July 2017, PayPal announced that customers will soon be able to pay with PayPal in store through the Samsung Pay app.

Note: Due to the rapid updates with this emerging technology, this list of supported cards and banks is subject to change and may not be the full list of Samsung Pay-compatible cards. You can view the list of supported cards at Samsung’s website.

Security

For consumer and business security, Samsung Pay utilizes tokenization, a process of protecting credit card information by creating a unique “token” that doesn’t reveal sensitive data. Additionally, customers will be required to authenticate purchases with a fingerprint scan on their smartphone.

Remember that as with all payments, businesses are liable for Samsung Pay fraud according to your existing fraud liability.

How much does it cost?

Using Samsung Pay in a store will be considered a “card present” transaction, and you will be charged according to your current credit card processing rates and fees. There is no additional fee beyond your processing rates and fees.

How can I accept Samsung Pay in my store?

Unlike Apple Pay, Samsung Pay works with both contactless and traditional magnetic stripe payment terminals. Samsung Pay defaults to contactless payment, but if a contactless terminal isn’t available or isn’t working correctly, Samsung Pay will switch to the backup MST technology.

If you currently have a traditional magnetic stripe terminal or a contactless terminal, you can contact your processor to ensure that you can accept Samsung Pay. Need a processor? Sign up for a free CardFellow account to find the right processor for your business.

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Ellen Cunningham

BY Ellen Cunningham

Ellen has a degree in English, which she puts to work every day researching and writing articles, processor reviews, and social media posts. She enjoys the challenge of explaining complex topics - making her a perfect fit for credit card processing - and strongly believes in CardFellow's mission of empowering business owners through education. When she's not busy following the latest industry news, Ellen can be found cycling the beautiful trails of southern New England, narrowly losing at pub quizzes, or practicing her trapeze skills in aerial circus class.

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5 COMMENTS

  1. from Harriet Rosheger, on February 28, 2016

    Are there any fees associated for the card holder for each transaction

    • from Ellen, on February 29, 2016

      Hi Harriet,
      There are no fees to the cardholder imposed by Samsung Pay. If the business charges a credit card surcharge, that cost may still apply.

  2. from Reece, on November 18, 2016

    Will Samsung pay work even outside my phone coverage area (remote area, out in the mountains, etc)? or does it require data to work?

    • from Ellen, on December 12, 2016

      Hi Reece,
      CNET states that you can, but will only be able to make 10 payments without the device using wifi or cellular data. You will need to have an active internet connection to add a card and to access transaction history.

    • from steven, on April 14, 2017

      Yes it will….to an extent. At least with the S3 Frontier smart watch, it can store ten tokens for use when your phone is not connected to the watch. After that it must be reconnected to the phones as it is the one making the tokens. Assuming your bank approves mobile payments,unlike mine who deliberately refuses to adopt it, your phone may or may not have a restrictions on how many tokens it may be allowed to make or approve when not in a cell signal covered area. Since it is based in part or whole on data created by the phone, there may be an underlying rule to govern that behavior. It could be regulated by phone maker ,Samsung, LG, or provider like Samsung pay, Apple Pay, or Android pay.