Samsung Pay Set to Crush Apple Pay

The newly-introduced Samsung Pay is about to crush Apple Pay, because all newer generation Galaxy mobile phones already work with 85 percent of “swipe-style” credit card machines.

Apple Pay has disappeared from CEO Tim Cook’s joyous hyping of Apple since the August release of a market survey by InfoScout and that showed the number of eligible Apple Pay users who tried the proprietary reader system dropped from 15.1 percent in March to 13.1 percent in June. The survey also found that the percentage of respondents that had already tried Apple Pay credit service by March 2015, when asked in June, “Did you use Apple Pay on this transaction,” fell from 39.3 percent to 23 percent.

Samsung Pay was first released in South Korea a month ago and went live in the US on September 28. The system is an existential threat to electronic wallet systems that rely on supposedly next-generation credit card readers that use a technology called near-field communication, or NFC. In its first month in South Korea, Samsung Pay users rang up over $30 million in transaction volume.

The Samsung payments platform employs a patented technology from LoopPay, a company Samsung acquired for about $250 million in February. The disruptive advantage of the Samsung Pay electronic wallet system is that users can simply hold a late model Galaxy phone over the old-school magnetic-stripe reader spot where a customer or a cashier would normally swipe a credit card to register a credit or debit transaction. The technical genius is that LoopPay equipped phones emit a magnetic signal that mimics the stripe on traditional credit cards.

Apple Pay and Google Wallet both advertise that they are compatible in 1 million locations in the U.S. But that is only a fraction of the 14.8 million U.S. businesses that accept credit card transactions. Consequently, the number one complaint for both, according to the Wall Street Journal, is: “Hard to find stores that accept it.”

Samsung Pay started its American life this week with compatibility with 85 percent of all POS terminals, or at least 12.6 million locations. Samsung Pay is also compatible with NFC chip card readers and with “Square” credit card readers that clip on to smartphones, and which are extremely popular with very small businesses.

Samsung Pay users sometimes complain that, “Handling with existing swipe-card registers can be awkward,” but that is a night-and-day advantage over Apple Pay and Google Wallet, which are not compatibility with card readers for 87 percent of small businesses.

Samsung, Apple and Google all say they are adding support for “loyalty” card point systems, but that is a function of the speed at which the retailers make the data available.

Samsung Pay works with the Galaxy S6, S6 Edge, S6 Edge+ and Note 5 and is already accepted for existing MasterCard, Visa and American Express cards that have been issued by many big banks. Samsung phones on the AT&T, Sprint, T-Mobile and U.S. Cellular networks can already use Samsung Pay, but Verizon has not yet activated the service.


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