Hands-on with Samsung Pay, coming to Canada later this year

Igor Bonifacic

March 4, 2016 1:05pm

If the last two weeks have been an indication of anything, it’s that mobile payments are about to be a big thing in Canada.

Nowhere was that more apparent than at this year’s Dx3, which just wrapped up on Thursday. In a small conference room, the MobileSyrup team got a chance to go hands-on with one of the major mobile payment platforms that has yet to come to Canada, Samsung Pay.

If you had the chance to use Apple Pay, then almost everything about Samsung Pay will be familiar. The platform allows S7, S7 edge, S6, S6 edge, S6 edge+, Note5 and Galaxy A5 owners to save their credit card information to their device and then use it to tap and authorize payments at point of sales terminals. A combination of fingerprint authentication, credit card tokenization and Samsung’s security platform, Knox, help keep a person’s credit card information safe. It’s convenient, secure and definitely just a bit cool.

And unlike other mobile payment solutions, Samsung Pay is not only compatible with the latest NFC terminals, it can also work with older magstripe card readers as well. This is thanks to Samsung’s 2015 acquisition of LoopPay, a Massachusetts-based startup the South Korean company paid approximately $250 million USD to acquire. The company’s latest phones — including the upcoming S7 and S7 edge, as well as many of the devices it released throughout the course of 2015 — have a small magnetic coil embedded within their body. It’s this coil that allows any Samsung Pay-equipped smartphone to communicate with magstripe point of sales terminals.

The neat thing here is that Samsung Pay transactions completed with a magstripe point of sales terminal are just as secure as ones done with a NFC terminal. Whether a payment is completed with a magstripe or NFC terminal, a user’s credit card information goes through the same transmission path and security procedures.

In practice, the work Samsung has in this department will be helpful in Canada, but it won’t quite be the huge differentiator it is in markets like the U.S. According to a Samsung spokesperson, approximately 50 percent of Canadian merchants, both large and small, have a point of sales terminal that is equipped to handle NFC. In comparison, that number is closer to 10 percent in the U.S. and around 30 percent in other developed countries.

Samsung Pay

Moreover, from a merchant’s perspective, Samsung Pay is also a bit unusual in that the company has decided to not charge a transaction fee whenever it helps facilitate a payment. At least, that’s the case in the U.S. The company wasn’t able to confirm whether that will be the case in Canada, as well.

Otherwise, Samsung Pay is a no nonsense affair. There’s no NFC SIM card Samsung smartphone owners have to get from their carrier, and, well, they also don’t need to be on a specific carrier to use the platform either. In other words, the platform just works.

Samsung says its mobile payment platform takes a total of four seconds to process the entire transaction, and in our brief hands-on experience, the technology seemed to match this claim.

Of course, one major question remains, which is whether Canadian banks intend to support the platform. At Dx3, Samsung wasn’t ready to comment if Samsung Pay will support Visa and MasterCard at launch in Canada.

We’ll find out the answer to that question when Samsung Pay launches in Canada later this year.

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  • Eddie_Brock

    Would the end-user still have to give a signature if using the mag-stripe option?

    Seems a little counter-intuitive if the person has to go through all those security settings on their phone, just to have to sign a slip as well.

    • Igor Bonifacic

      There’s no signature needed when you use a magnetic stripe to complete a transaction. It’s there to ensure you can use the platform no matter what type of PoS a merchant has.

    • mxmgodin

      I’ve seen a lot of terminals in Canada that won’t let you use the mag-stripe unless the chip fails to read correctly.

      For example, if you tried to swipe it first, the terminal will detect that your card is chip-enabled, and tell you to insert the chip. And then, only if it fails reading the chip a certain number of times, the terminal will let you complete the transaction with the mag-stripe.

      Wouldn’t terminal with that security option render the “mag-stripe” feature of Samsung Pay useless? Or does Samsung Pay goes around it by making the terminal “believe” it’s a mag-stripe-only card, with no chip?

    • Igor Bonifacic

      Without getting into the technical details, this won’t be an issue.

      Besides the way it transmit your credit card data to the terminal, whether Samsung Pay uses NFC or MST, the same security safeguards are in place. Your credit card information is turned into a token (basically a random set of numbers) prior to leaving your phone and sent through the same set of server side security checks on the Visa/MasterCard/Amex side.

    • DonatelloNinjaTurtle

      Do POS terminals need to be updated for Samsung Pay to work over magstripe? Or can regular/existing magswipe readers work with Samsung Pay using tokenization?

    • Igor Bonifacic

      They may need a software update — I didn’t get a chance to ask the Samsung representative — but merchants won’t need to physically upgrade their terminal.

    • It’s Me

      They shouldn’t. The tokens are made to imitate real account numbers. That is, they aren’t valid MasterCard/visa account numbers but they look like them to the mag stripe reader. The banks then receive the token as an account and do the bankend matching to the real account.

    • Luke Perry Glover

      It seems more like paypass to me, than swiping. 😉

    • Izek Shteinberg

      Samsung Pay is digital, therefore it won’t give the terminal any info of the chip. In other words it will be chipless card which terminal won;t ask for chip

  • Jason

    the magcoil sound really cool, we’re almost at the point we don’t need a carry a wallet anymore, we have mobile payments and Volvo has bluetooth entry. Its going to be interesting to see where we end up in 10 years.

    • Eddie_Brock

      As it is, I have a wallet-case for my current phone that I keep my debit card and Driver’s License. I don’t generally carry a wallet unless I plan to need additional cards.

      The NFC on the card works through the phone-case, so it’s basically like a mobile pay option. My next phone will have this feature built in, but I sure hope it takes off in Canada. I have an NFC enabled phone right now, but the software end of things has been a joke here in Canada.

    • Izek Shteinberg

      What if you need to pay more than $100?
      You still need a wallet with you, touch only gives certain amount…

    • Jason

      $100 is just the default amount you can raise it, but even then we have finger print readers, iris scanners, facial recognition, and gps verification so I think we can have safe tap for high payments

    • Izek Shteinberg

      Only if the banks agree to raise, and the ATMOSPHERE machine will have the contact less withdrawals, then yes no more cards

  • mxmgodin

    “Of course, one major question remains, which is whether Canadian banks intend to support the platform. At Dx3, Samsung wasn’t ready to comment if Samsung Pay will support Visa and MasterCard at launch in Canada.”

    If they also launch Amex-only, that is not going to help mobile payments take off this year…

    • KiwiBri

      Visa and Mastercard need to be onboard. That willhelp the general public get on board. AMEX isnt as common as the other 2 cards.

    • It’s Me

      In Canada, unfortunately, the banks can c-block visa and MasterCard.

    • Izek Shteinberg

      Yep, because banks supporting mobile carriers.
      Samsung Pay=No mobile carriers

    • It’s Me

      Nah, the banks don’t care about the carriers. The banks let in Apple Pay. The banks will let in Samsung Pay when the banks decide to let in Samsung Pay. The banks hold all the cards and act as a unified cartel against all of the payment vendors.

      In Australia their banks tried the same thing, to act as a single negotiating cartel. Their regulators seem to be saying, that this is clearly anti-competitive. Our regulators were probably out golfing instead of doing their job.

    • Eddie_Brock

      If I knew my debit would be supported, I’d seriously consider the S7 over the 6P I intend to get.

      Unfortunately, I’m a bit jaded as I’ve had a NFC phone and sim card for 3 years and the adoption and software end has been terrible thus far.

    • southerndinner

      Carrier and bank paired NFC solutions are so, so awful

    • thereasoner

      The new update to my TD app works great on my GS6. Mobile Payments made easy although I still prefer cash and I set it up on my phone primarily as a back up option should I need it.

    • It’s Me

      I thought you said your bank would have to offer you a huge incentive just to use mobile payments…guess availability was the incentive.

    • thereasoner

      Yeah, they would if I were to use it all the time. I still prefer cash or my card now but I am trying to set this up as a backup for when I forget my wallet.

      That said, I’m in the process of seeing where it will work and so far I’m 1 for 2.

    • Acco

      I’m at 2 for 2. One on Verifone equipment, the other on TD branded equipment. It’s been pretty good so far. I’m not planning on using it day to day, but wanted to see it work.

      To be fair, I’m more looking forward to the day when I can use my phone as my transit pass.

    • thereasoner

      Yeah, it would be great if our phones could really replace our wallets with digitalised versions of all our ID, until then the mobile wallet thing is primarily a back up option for me.

    • thereasoner

      If you ever want to make Mobile Payments a regular thing for yourself then Samsung is the way to go because you can still use it without NFC. That said, the 6P is a nice device also.

    • It’s Me

      except, for now, you can’t use it in Canada. So that’s not a selling point just yet. Yet.

    • thereasoner

      I read somewhere that only 60 % of terminals in Canada are NFC capable. Would like confirmation of that, I know that the one they brought to me at my table in the restaurant I was at didn’t have it.

    • It’s Me

      Over 2 years ago, 75% of major retailers in Canada accepted tap and pay.

      http://venturebeat.com/2014/02/04/why-canada-just-might-be-the-future-of-u-s-mobile-payments/

      In Canada, 75 percent of major retailers accept contactless payment. In the U.S., fewer than 2 percent of retailers do the same.

      With the attention it’s received since then it is likely much higher be.

    • thereasoner

      What about restaurants and other establishments? Perhaps the 60% number I read included everything.

    • Izek Shteinberg

      Walmart doesn’t have contactless

    • gommer strike

      Yes correct – the keyword is *major* retailers. Problem is? All the smaller guys, the shops, the restaurants, the food court vendors…yeah all on legacy devices :/

    • It’s Me

      All the smaller guys? Not, not all. Some. Many even. But not all. But they are transitioning too. As they replace equipment or expand the POS coming in will be compatible.

      The simple fact is that they are becoming the norm. I think we’re passed that point already.

    • gommer strike

      I’ll believe it when I start seeing the handhelds at the many places that I frequent in Coquitlam, Richmond, Vancouver, etc. Many of these are just mom-and-pop shops or otherwise smaller businesses.

      But OK. We’ll give it another year. I’ll be willing to give it even another 2 – 3 years. But if I’m still seeing them use the same equipment(the old stuff that doesn’t even do chip tap-to-pay support) that I’m seeing them use today – well…ya know…

    • It’s Me

      Yeah, but if they don’t even have chip and pin, it’s not the type of place you should be paying with credit or debit anyway, unless you want to just leave you card with them and tell them your PIN. For anywhere else that you would use plastic, then it’s most likely they support it already or will very soon.

    • gommer strike

      :/ yeah it’s true. If you don’t see that wave-like symbol that looks like wireless on the handheld device, the terminal doesn’t support it.

      there’s just so many of the older terminals out there. I don’t think the merchant feels terribly rushed to upgrade them just so that Apple/Samsung pay would work on them.

    • Dennis Furlan

      According to the article, Samsung says it’s 50 percent in Canada. Many Canadian Samsung Pay users would probably want to use it in the U.S. and abroad. I wonder if that’s supported: cross-border use.

    • thereasoner

      For credit card I’m sure it would be, probably not for debit however.

  • gueststar

    are all these payment methods like cross compatible or are some stores only going to have apple pay while some have samsung pay and others have neither.

    • Igor Bonifacic

      Yes, they’re cross compatible. Merchants don’t need to get separate Samsung Pay or Apple Pay branded point of sales (PoS) terminals to support both platforms. Any modern terminal with NFC will work with both. The advantage of Samsung Pay over Apple Pay (and other mobile payments platforms, for that matter) is that Samsung Pay supports legacy magstripe terminals, which are still used by most merchants across Canada and around the world.

    • gueststar

      sweet thanks

    • Adam

      Pretty much every merchant that I see in Montreal supports NFC. Payment terminals are normally rented from the payment processor (even when they’re purchased, they’re sold for multiple times street price and are locked to the payment provider), so they tend to get cycled with newer ones.

  • DonatelloNinjaTurtle

    I’m very curious to see which banks are on board with Samsung Pay.

    • jay

      hope all and debit cards please

  • Francois Roy

    How could you NOT mention that the whole platform still only works with 3 cards in the US?
    “no nonsense”? “it just works” ????
    Nice paid advertisement, guys.

    • downhilldude

      Those 3 cards are Visa, MasterCard, and Amex, and are from dozens of popular financial institutions, so what is the complaint exactly?

  • ciderrules

    Since Samsung Pay requires the banks to update their back end software (the same as they do with Apple Pay), it’ll be up to the banks whether either of them come here.

    • MBTechno

      Which means only a few of the biggest banks will support Samsung Pay.

  • jay

    Well the biggest problem will be the support if the big players not support the paying option than its just waste of time like Apple pay

  • Dennis Furlan

    Well, the banks better get on board, since their mobile payments systems are limited and/or non-functional. I tried using RBC Wallet at an NFC Petro Canada gas pump, and it didn’t work.

  • KylDemon

    Still nothing. I wonder how much longer they will take to release it.