Samsung Pay ushers in the era of phone-to-phone payment

Samsung Pay uses both near-field communication and secure magnetic transmission to communicate payment information.

Samsung Pay, which uses both near-field communication (NFC) and secure magnetic transmission (MST) to transmit payment information, will be used more widely in the future. Indeed, the company has developed a payment module that allows money to be exchanged between smartphones and to pay with credit cards using an NFC chip in smartphones.

Once the module is installed, smartphones can be used as mobile credit card payment terminals. When ordering food for delivery or going to a gas station, you can pay for food or gas with your smartphone without any wireless credit card payment device. In doing so, you are not using the Value Added Network (VAN), due to the direct communication with the card companies. As a result, credit card fees will be reduced along with monthly rental, maintenance and communication costs caused by the use of expensive wired and wireless card payment terminals.

Hankook NFC, a mobile payment startup, announced on November 5 that it has filed an application for a patented technology that reads Samsung Pay with NFC when downloading the app on smartphones, and talks with Samsung Electronics to develop services that can use Samsung Pay. to transfer money between smartphones and expand the market.

In fact, there have been comments that errors occur when customers try to use Samsung Pay at gas stations. Samsung Pay, which uses a one-time security token method, cannot be used at self-service stations due to their characteristics of approving an actual payment after approval of the preliminary payment. That is why Samsung Electronics is also looking for appropriate measures, including the implementation of an NFC payment module, to resolve such errors.

An official from a financial technology company said, “If Samsung Electronics expands the application of the NFC payment module, smartphones with Samsung Pay can be used as mobile payment devices. As a result, it is not only possible to transfer money between smartphones, but also to pay with credit cards.

When smartphones replace credit card payment devices like this, it will greatly affect the home VAN ecosystem first. Currently, VAN companies receive commissions in the payment authorization process after installing their private lines in offline stores and credit card payment terminals. However, the mobile payment system does not require a private line or card payment device and allows credit card companies to authorize payments directly. Thus, the NPV is no longer necessary, according to the majority of industry experts.

In fact, an American startup has also completed the development of the NFC payment module and provides the service in the country. However, the locally developed NFC payment module can quickly dominate the market with the powerful leverage of Samsung Pay.

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