Electronic Payments: Samsung Pay in Final Tests with 8 Local Card Companies | BusinessKorea

Tuesday, August 30, 2016

Samsung Pay uses Near Field Communication to transmit payment information.
Samsung Pay uses Near Field Communication to transmit payment information.
SEOUL, SOUTH KOREA
3 July 2015 - 2:30pm
Cho Jin-young

Before the rollout of Samsung Electronics’ mobile payment platform Samsung Pay in Sept., the company is strengthening tests on its technology with card companies for the last time. Samsung is struggling due to the fact that its technology to send information to card readers at checkout counters through magnetic fields does not work as smooth as was thought. 

According to financial industry sources on July 2, Samsung Electronics is conducting various technical tests with eight domestic card companies before the official launch.

The payment of Samsung Pay, powered by Loop Pay, works like this. First, a user creates a replica of a card's magnetic information, which is represented as a card on the mobile device screen. Second, the user authenticates their own identity by putting a finger on the home button of the smartphone. When the user does this, the smartphone recreates the magnetic field of the card. Then, the magnetic field created by the smartphone is used to activate a Credit Authorization Terminal (CAT) just like a physical plastic card.

But the rumors are that the fingerprint verification and magnetic field formation still don't work correctly, so Samsung Electronics keeps testing the technology with card companies. Since Samsung Pay requires users to verify their fingerprints on mobile devices and form magnetic fields every time they pay at checkout counters for security reasons, it is crucial to reduce error rates for quick payment.

Industry watchers say that older card readers in some partner stores are also having difficulties recognizing the magnetic fields of the system. There are more than 100 kinds of CAT terminals in its partner stores, including in restaurants and markets across the nation. Among them, more than 50 percent are more than 10 years old, and cannot recognize the magnetic field payment system. 

An official familiar with the development of Samsung Pay said, “Samsung Electronics has decided to delay the release date of Samsung Pay from July to Sept. 1st in a bid to make it technically perfect. To minimize the error rates, the company is carrying out various tests.”

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