Korean consumer electronics company Samsung launched Samsung Pay in Australia.
The Apple Pay rival works on a range of Samsung smartphones including the Galaxy S6, Galaxy S6 edge, Galaxy S6 edge+, Galaxy Note 5, Galaxy S7 and Galaxy S7 edge, and has the potential to be the country’s leading contactless payments system.
Samsung Pay wants to take things one step further and replace the cards in wallets, from credit to library, gym, loyalty and even public transport cards.
At the launch today, Samsung hinted that it was looking at using the technology to replace the likes of an Opal or Myki card, but would not be drawn further.
Australia is just the fifth country the mobile payments system has been rolled out to after launching in South Korea last August, followed by the US, China and Spain.
Its launch partners are Citibank and American Express and include co-branded cards such as the David Jones Amex and Emirates Citi World MasterCard.
Samsung Pay’s global VP, Elle Kim, said within six months of launching in Korea and the US, Samsung Pay has surpassed more than 5 million registered users and has already processed more than $US1billion of transactions in South Korea alone.
“It’s our goal to one day replace wallets, by making every card accessible on Samsung smartphones. In countries like Australia, where customers are already using their smartphones to make payments, our customers will certainly value the benefits of having all their cards in one place and Samsung Pay will provide that convenience to them,” she said.
“Samsung Pay adopts an open engagement model, designed to support payment and non-payment cards from multiple providers. By doing this, Samsung can operate seamlessly with a wide range of partners, systems and payment channels.”
Samsung boasts that its system is the most widely accepted in the world. Its point of difference to Apple and Android Pay, which use NFC (near-field communications) technology, is that Samsung Pay also incorporates magnetic secure transaction (MST) technology, which replicates the magnetic strip swipe on credit cards and means every terminal can support it.
“The MST technology enables Samsung Pay to support partners that use a traditional magnetic stripe, commonly found on loyalty cards, gift cards and transit cards, both in Australia and across the globe,” Kim said.
There are three levels of security, including fingerprints and/or a 4-digit pin, tokenisation, and the proprietary software, Knox, which scans to check security and can permanently disable Samsung Pay on a compromised device.
Paying is a swipe up to choose the card you want, authenticating the transaction via the fingerprint sensor and tapping the phone on the point of sale terminal.
It can also be used in an offline mode.
While Android Pay would also work on a Samsung phone, the Google platform has yet to launch in Australia, despite saying it would roll out in the first half of 2016.
One additional challenge both Apple and Samsung face is that Australia’s big four banks are also jostling for position with their own app payments systems, although Apple signed on ANZ in April.
Android-based phones have around 60% of the Australian market, well ahead of Apple’s 35% share.
Telsyte managing director Foad Fadaghi said Samsung and Apple have more than 70% combined share of smartphone installed base in Australia, and both enjoy high repeat purchase intentions.
“In a market that has a high rate of contactless payment uptake already, both companies will be looking to their payment solutions to drive loyalty,” he said
“Samsung Pay will help the Samsung build even greater loyalty to its products, and less reasons to shift to another Android vendor.”
But to succeed they need to get the major banks onside Fadahi argues
“While it’s a good start with Citibank and Amex, Samsung will need to attract more partners, especially a major banking partner, as Apple did with ANZ,” he said.
NOW WATCH: Tech Insider videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.