Earlier this week, Samsung announced that in addition to expanding to larger markets like China this year, Samsung Pay will be coming to Canada as well.
Like other mobile payment services like and , Samsung's version substitutes a physical credit card for a smartphone — in this, a Galaxy S6 or S7 series — to make physical payments in stores. Unlike those services, though, Samsung relies on a technology called MST, or Magnetic Secure Transmission, to transfer the payment credentials from the phone to the payment terminal. This does two things: it removes the onus on the merchant to have an NFC-enabled payment terminal; and it allows Samsung Pay to work with practically any existing payment terminal in the U.S. Essentially, Samsung Pay mimics the physical magnetic stripe on the back on a credit card. Pretty smart, actually.
Android and Apple Pay, on the other hand, require NFC-based terminals because they use a system called EMV, a standard formed by Europay, MasterCard, and Visa (hence the name) which moves secure card credentials from the easily-duplicated (and often-stolen) magnetic stripe to a small gold-colored microchip usually located on the top of the card.
Now, Samsung Pay also supports NFC-based payments using EMV technology along with MST, but regardless of which method is used to make a payment, Samsung smartly implemented a second layer of protection: tokenization. Essentially, instead of transmitting the actual PAN, or credit card number, from the phone to the payment terminal, when the card is first added to Samsung Pay it generates a token — a random series of numbers that only the payment network, such as Visa or MasterCard, can decode — that is given to the merchant. If, for some reason, that number is intercepted, it will not be of much use to any potential hacker, since it's single-use number that can easily be changed if reported stolen.
So what does this mean for Canada?
While we don't know when exactly , we know a few things: Samsung added Canada to its "2016 Roadmap" for the mobile payment service; and when it arrives, it will likely have limited credit card support.
Apple Pay with, ironically, only American Express support, since the payments company operates as both a bank and credit card issuer in Canada. The move was mirrored in a number of other countries, including Spain and Australia, which likely means Apple is attempting to "batch" negotiate with Visa- and MasterCard-issuing banks in multiple countries at once.
While Samsung claims that Samsung Pay will support loyalty and gift card storage at some point in the future, it's likely that it will look and feel very similar to Apple Pay when it launches in Canada. The company has confirmed that it will have NFC support (which means it will definitely use EMV technology, though that isn't explicitly stated) when it comes to Canada, since most merchants no longer accept payment through magnetic stripe for security and liability reasons.
How would you like to see Samsung Pay evolve? And are you excited to see it come to Canada? Let us know in the comments below!
