The announcement of Samsung Pay, in direct competition with Apple Pay, is a signal that payments with mobile devices are growing up, writes ARTHUR GOLDSTUCK.
Once a year, Barcelona plays host to an event that signals the key shifts in mobile technology, setting the agenda for personal gadgets for the rest of the year. Mobile World Congress 2015, which took over the city for most of last week, pushed the boundaries just a little further than usual.
The most significant announcement of the week was not a device, however, but a new way of doing something as old as civilisation: making payments.
When Samsung unveiled its new Galaxy S6 and S6 Edge, it also declared the next phase in its war with Apple. Back in September, Apple had announced the iPhone 6 and 6 Plus, along with a payment system called Apple Pay. The similarity in names is no coincidence. Samsung wants to make it clear that, not only is it playing in the same space as Apple, but it is doing it better.
Apple Pay works through NFC, or near-field communication, which allows the sending of data from one device to another with a single tap. That data can include files, photos and payment or transactional information, if it has been set up in advance. As a result, a single tap, authenticated via the fingerprint sensor on the iPhone 6, can conclude a transaction at an NFC terminal in a retail outlet.
Samsung Pay goes a step further. While it also offers fingerprint verification and NFC, which is still in limited use in the retail world, it ups the ante with MST, which caters for the vast majority of retailers who still use magnetic stripe card readers.
MST, for magnetic secure transmission, allows a device to be placed alongside a card terminal and send a radio signal that mimics the interaction of the magnetic stripe on a card with the terminal. It instantly allows Samsung Pay to be compatible with any retailer in the world that accepts credit, debit or payment cards.
Samsung’s leapfrog over Apple was made possible by its acquisition, earlier this year, of a company called LoopPay, which describes itself as “the world’s first mobile wallet solution that allows consumers to pay with their mobile devices at most places and leave their wallets at home”.
The LoopPay solution, as it existed prior to last week’s announcement, consisted of a LoopPay App and a LoopPay device, which worked in tandem.
“The App manages and securely stores all payment cards including credit, debit, loyalty, and gift cards on the device,” LoopPay explained. “Currently, we offer the LoopPay Card, CardCase, and a stand-alone Case for iPhone 5/5s, 6, and 6 Plus.”
The company’s explanation of how LoopPay works provided no inkling of the scope of Samsung Pay, as it implied any manufacturer could use it. Samsung turned the market on its head with one simple innovation: it built the LoopPay technology into the Galaxy S6 and S6 Edge, instead of providing an accessory device.
The result is that the phone merely needs the app to be activated for it to run Samsung Pay. It also means that the accessory case for iPhones is almost instantly obsolete.
The service is initially being launched in Samsung’s home territory, South Korea, and in the United States – a direct challenge to Apple. There is no timeframe on its roll-out elsewhere, which suggests Samsung is initially more focused on taking on Apple than on serving consumers.
That is also, most likely, the reason for the cut-and-paste branding of the payment service. It may be the snappiest possible title, but calling it Samsung Pay is also the most sincerest possible form of flattering Apple. If the wheels come off this particular bandwagon, it will be more than a financial disaster for Samsung.
Later this year, American retailers will be required to implement EMV (Europay MasterCard Visa) “chip-and-pin” terminals, which may well have to include NFC technology. That opens the rest of the US market to Apple, but still leaves Samsung with a global edge.
In the meantime, other challengers are likely to emerge. Rumours have already surfaced that LG Electronics will build payment technology into the next version of its flagship phone, to be called the LG G4. Numerous mobile payment applications will also have to change their game or find a way to integrate or add to the two Pay systems.
Google Wallet, which was once expected to dominate mobile payments, is fast fading into the background. Its near-demise is a timely lesson to the Pay masters of the mobile world that market domination in one arena does not automatically lead to market success in another.
LoopPay on how MST works:
“MST technology generates changing magnetic fields over a very short period of time. This is accomplished by putting alternating current through an inductive loop, which can then be received by the magnetic read head of the credit card reader. The signal received from the device emulates the same magnetic field change as a mag stripe card when swiped across the same read head. LoopPay works within a 3-inch distance from the read head. The field dissipates rapidly beyond that point, and only exists during a transmission initiated by the user.”
Now download a bank account
Absa has introduced an end-to-end account opening for new customers, through the Absa Banking App, which can be downloaded from the Android and Apple app stores. This follows the launch of the world first ChatBanking on WhatsApp service.
This “download your account” feature enables new customers to Absa, to open a Cheque account, order their card and start transacting on the Absa Banking App, all within minutes, from anywhere and at any time, by downloading it from the App stores.
“Overall, this new capability is not only expected to enhance the customer’s digital experience, but we expect to leverage this in our branches, bringing digital experiences to the branch environment and making it easier for our customers to join and bank with us regardless of where they may be,” says Aupa Monyatsi, Managing Executive for Virtual Channels at Absa Retail & Business Banking.
“With this innovation comes the need to ensure that the security of our customers is at the heart of our digital experience, this is why the digital onboarding experience for this feature includes a high-quality facial matching check with the Department of Home Affairs to verify the customer’s identity, ensuring that we have the most up to date information of our clients. Security is supremely important for us.”
The new version of the Absa Banking App is now available in the Apple and Android App stores, and anyone with a South African ID can become an Absa customer, by following these simple steps:
- Download the Absa App
- Choose the account you would like to open
- Tell us who you are
- To keep you safe, we will verify your cell phone number
- Take a selfie, and we will do facial matching with the Department of Home Affairs to confirm you are who you say you are
- Tell us where you live
- Let us know what you do for a living and your income
- Click Apply.
How we use phones to avoid human contact
A recent study by Kaspersky Lab has found that 75% of people pick up their connected device to avoid conversing with another human being.
Connected devices are becoming essential to keeping people in contact with each other, but for many they are also a much-needed comfort blanket in a variety of social situations when they do not want to interact with others. A recent survey from Kaspersky Lab has confirmed this trend in behaviour after three-quarters of people (75%) admitted they use a device to pretend to be busy when they don’t want to talk to someone else, showing the importance of keeping connected devices protected under all circumstances.
Imagine you’ve arrived at a bar and you’re waiting for your date. The bar is busy, and people are chatting all around you. What do you do now? Strike up a conversation with someone you don’t know? Grab your phone from your pocket or handbag until your date arrives to keep yourself busy? Why talk to humans or even make eye-contact with someone else when you can stare at your connected device instead?
The truth is, our use of devices is making it much easier to avoid small talk or even be polite to those around us, and new Kaspersky Lab research has found that 72% of people use one when they do not know what to do in a social situation. They are also the ‘go-to’ distraction for people even when they aren’t trying to look busy or avoid someone’s eye. 46% of people admit to using a device just to kill time every day and 44% use it as a daily distraction.
In addition to just being a distraction, devices are also a lifeline to those who would rather not talk directly to another person in day-to-day situations, to complete essential tasks. In fact, nearly a third (31%) of people would prefer to carry out tasks such as ordering a taxi or finding directions to where they need to go via a website and an app, because they find it an easier experience than speaking with another person.
Whether they are helping us avoid direct contact or filling a void in our daily lives, our constant reliance on devices has become a cause for panic when they become unusable. A third (34%) of people worry that they will not be able to entertain themselves if they cannot access a connected device. 12% are even concerned that they won’t be able to pretend to be busy if their device is out of action.
Dmitry Aleshin, VP for Product Marketing, Kaspersky Lab said, “The reliance on connected devices is impacting us in more ways than we could have ever expected. There is no doubt that being connected gives us the freedom to make modern life easier, but devices are also vital to help people get through different and difficult social situations. No matter what your ‘connection crutch’ is, it is essential to make sure your device is online and available when you need it most.”
To ensure your device lifeline is always there and in top health – no matter what the reason or situation – Kaspersky Security Cloud keeps your connection safe and secure:
· I want to use my device while waiting for a friend – is it secure to access the bar’s Wi-Fi?
With Kaspersky Security Cloud, devices are protected against network threats, even if the user needs to use insecure public Wi-Fi hotspots. This is done through transferring data via an encrypted channel to ensure personal data safety, so users’ devices are protected on any connection.
· Oh no! I’m bored but my phone’s battery is getting low – what am I going to do?
Users can track their battery level thanks to a countdown of how many minutes are left until their device shuts down in the Kaspersky Security Cloud interface. There is also a wide-range of portable power supplies available to keep device batteries charged while on-the-go.
· I’ve lost my phone! How will I keep myself entertained now?
Should the unthinkable happen and you lose or have your phone stolen, Kaspersky Security Cloud can track and protect your device from data breaches, for complete peace of mind. Remote lock and locate features ensure your device remains secure until you are reunited.