Samsung Pay could overtake Apple Pay in mobile payments | Hacker News Reader

Samsung Pay could overtake Apple Pay in mobile payments

networkworld.com

4 pointsstevep20075 comments

Apple may have lost its lead in contactless payments yesterday when Samsung introduced its universally accepted Samsung Pay at Mobile World Congress. This may be somewhat surprising considering just last September Apple convinced the mobile industry that it had revolutionized credit and debit card payments with Apple Pay.

LoopPay is considered an inferior technology and it has a short life expectancy ahead of it. It mimics the magnetic swipe of credit cards allowing it to work on common credit card swipers without NFC. However, credit card swiping will gradually disappear because it is not as secure as newer mechanisms that don't transfer credit card credentials to the merchant. These new mechanisms are mandated by law, because a new rule will shift liability from cc companies to merchants in the event of fraud. There are other aspects of Samsung Pay besides LoopPay that I am ignoring, but they won't have the same market reach as Apple Pay.

> These new mechanisms are mandated by law

AFAIK no, it's just that MasterCard and VISA put it in their contracts.

> as newer mechanisms that don't transfer credit card credentials to the merchant

AFAIK even with EMV the merchant still gets the PAN, in the case of tokenization it's just not the "real" one. The Samsung press release mentions tokenization but it's not clear to me whether this will always be used or is just an option.

The feature that gives Samsung Pay ubiquity comes from LoopPay and mimics magnetic swiping. It can be used in many places where traditional credit cards can be used, but not when credit cards need to be inserted such as vending machines. This does not use tokenization or rely on NFC. Hence it's still as insecure as a traditional credit card.

Samsung may incorporate tokenization, but that's outside of magentic swiping and requires NFC terminals. This is where Samsung is lagging Apple Pay.

LoopPay will become obsolete on October 2015, when liability rules shift, and EMV-based machines replace older machines and chip and pin cards are mailed by banks to consumers. It's not just Mastercard and Visa (although they are responsible for the M and V in the name), but also Amex and Discover. These new machines will support tokenization and NFC. The machines may also incorporate requirements stemming from the Durbin amendment.

The article doesn't address security. The point of Apple Pay was the merchant, who've proven themselves untrustworthy, doesn't have any of your credit card info. If Samsung Pay provides similar functionality then they may have something. I don't see how they could though without the merchant having to change their backend processing, thus destroying the ubiquity.

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