April 22, 2015
Samsung SDS, the IT service arm of Samsung Group, is poised to launch a new fingerprint mobile payment service in South Korea. The launch will take place with the help of local payment gateway service providers, KG Mobilians and KG Inicis, as reported by ZD Net. Samsung has also signed an agreement with KICA (Korea Information Certificate Authority), the South Korean government backed certificate licenser. The tech giant is further planning to launch more authentication services based on biometrics.
Samsung’s biometrics authentication solution has already been vetted by the FIDO (Fast IDentity Online) alliance. This would help Samsung takes its authentication solutions globally. This upcoming capability has not yet been defined publicly as to how it would work, but could involve fingerprint and iris scans. However, we can certainly say that this new initiative can be linked to Samsung Pay which was launched earlier this year at Mobile World Congress. The new Samsung SDS system is paving the way for the launch of Samsung Pay in South Korea.
Considering Samsung Pay in more detail, it has two major components:
Samsung Pay: NFC
The NFC portion of Samsung Pay is similar to Apple Pay and uses the same standardized infrastructure of NFC built on Visa's PayWave and MasterCard’s PayPass systems that Google Wallet and Apple Pay use. The explosive growth of NFC locations in North America is over 650,000. This growth is not nearly the often quoted 25 million businesses, but it turns out that at only about a third of these locations would it make sense to even accept payment cards. Some businesses are just manufacturing businesses that sell in large quantities with large ticket sizes. Thus at the current rate, NFC business locations will reach a critically important level by this summer.
Samsung Pay uses a fingerprint scanner to approve the transaction, but it has a very different technology to get an accurate scan, more of a swipe then the placement of a finger as one is used to with Apple Pay.
Samsung Pay: MST
The MST portion, which is technology recently acquired as part of LoopPay, is expected to work at 95% of merchants per Samsung. This may be close to true in theory because MST simulates a card swipe through magnetic induction to the magnetic card reader head on the payment card terminal. The technology is interesting and would have been outstanding in 2008 if promoted correctly, but as a very early user of LoopPay, I discovered very quickly that merchants were very, very uneasy about a transaction that took place outside the normal patterns of card usage.