How Samsung and Apple will grow the mobile payment ecosystem, their own way

Mobile payment technology has been growing its user base and advancing in sophistication for some time – and it seems it won’t be long before it becomes the bona fide mainstream form of payment in the world. The route there may be slightly more complicated than first thought though, as the device manufacturers are all approaching payments with their own proprietary services.

Apple Pay has launched in the U.S. and recently in the UK. Hundreds of thousands of shops accept payments and in London, you can use the Apple Watch on the metro.

Samsung Pay is available in Korea and is due to launch in the US on September 28th. It will be a direct competitor to Apple Pay, and while first mover advantage may apply, Samsung does have a few things going for its version, that may help it scale quickly amongst consumers.

Here are some key points to note about both systems:

  1.  Both payment systems use tokenization which substitutes actual payment credentials for tokens, in order to keep your card’s details private. Actual card details are securely stored in a back-end Hardware Security Module (HSM).
  2. Key to secure service delivery here is storing these payment credentials in devices using either tamper proof Embedded Secure Elements (eSE) or a Trusted Zone within the device
  3. The authentication side of the process is also similar, as biometric ID is used through fingerprint sensors for both platforms.
  4. Both Samsung Pay and Apple Pay are supported by the main international card issuers
  5. While both support NFC, Samsung Pay also offers a supporting system called Magnetic Secure Transmission (MST). This lets users swipe their cards like they used to on payment terminals that don’t offer contactless or chip-and-PIN. This combination of NFC and MST means Samsung will be able to immediately reach more merchants, as nearly every merchant uses magnetic stripe technology. This is especially true in the U.S., where EMV cards are still not widespread. This advantage may not last though as laws are coming into effect in October in the U.S. requiring merchants to upgrade their terminals to newer EMV technology, and banks to issue EMV cards.

Our strategy has always been to offer device makers the most robust technology and connection services to deply their NFC services worldwide. Allynis Trusted Service Hub (TSH) facilitates and accelerates deployment with both payment issuers and services like banks and public transport providers. The TSH is designed to remove the complexity of delivering value added services to everyday users. Here’s a quick diagram of how it brings service creators and enablers together:

Gemalto Trusted Service Hub

The combination of a larger merchant pool and ability to bring banks and service providers onto the platform quickly and securely will be crucial in helping device makers gain traction for their payment platform.

We’ll be watching closely how people take up mobile payments and will be sharing our findings with you.

What do you think?  And will consumers adopt mpayments as long as they can pay freely with whichever mobile they own? Let us know by tweeting to us @Gemalto, or leave a comment below.

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