Samsung Pay service will no longer be free for credit card issuers

For the Korean market, Apple launched Apple Pay and this seems to have an impact on Samsung. After the launch of Apple Pay, Samsung is totally changing its business plan with respect to Samsung Pay. Users and credit card firms can presently use Samsung’s mobile payment service for free. Samsung, however, intends to bill credit card firms just like how Apple does.

Business Korea reports that Samsung Electronics has informed all Korean credit card issuers that it will no longer provide the Samsung Pay service free of charge. Samsung Pay has been a free service for card issuers (banks) and users (owners of Galaxy phones) since it first went live in 2015. However, Samsung will soon begin levying a small fee on South Korean credit card issuers. The strategy is expected to expand to all markets around the world where Samsung Pay is available.

According to the report, credit card issuers have widely pushed Samsung Pay to over 16 million users over the eight years prior and think it will continue to be free. They were now taken by surprise by Samsung. They might scale back the benefits offered to end buyers in an effort to save costs. Although it claims that deals between firms are autonomous, the South Korean government may step in if the costs are passed on to users.

Why pay for Apple Pay and not Samsung Pay?

Insiders in the financial sector believe that Samsung’s choice is directly tied to the recent launch of Apple Pay in South Korea. A credit card company executive said, “After Hyundai Card, other card firms are also planning to launch Apple Pay, so Samsung Electronics can no longer wait and see. I think Samsung Electronics thinks, ‘If the credit card issuer pays for Apple Pay, why should the credit card issuer pay for Apple Pay? Why won’t they pay for Samsung Pay?’”

According to some observers, Samsung is trying to put pressure on credit card firms that have not yet adopted Apple Pay by raising the fees they have to pay. However, Samsung claims that there is no decision on this at the moment.

There are rumours that Samsung will start formal talks with credit card firms by August 10.

In South Korea, Samsung has also implemented a number of alternatives to Apple Pay. For instance, Samsung Pay and Naver Pay have partnered to allow users to utilise Samsung Pay to make online purchases. In order to compete with Apple Pay, Samsung also wants to make Samsung Pay available on the Galaxy Watch in South Korea.

What is Samsung Pay

If you are well conversant with Samsung Pay, then this section is probably not for you. Here, we look at succinct details on the features of Samsung Pay as well as how it works and its benefits. Samsung Pay is a mobile payment service that allows users to make payments using their smartphones. It is a convenient and secure way to pay, and it is accepted at more places than any other mobile payment service out there. 

Features of Samsung Pay

Samsung Pay is a tap-to-pay service that allows users to make payments using their smartphones. It is active virtually anywhere you can swipe a card, as well as select mobile and Bixby merchants. For in-store purchases, you can swipe up from the home screen to launch your favorite card, verify your fingerprint, and then hover your device over the card reader to pay. Samsung Pay also allows users to store their credit and debit cards, as well as gift cards and loyalty cards, in one place. This means that users can leave their wallets at home and use their smartphones to make payments.

How Samsung Pay Works

Samsung Pay uses a technology called Magnetic Secure Transmission (MST) to make payments. MST allows Samsung Pay to work with almost any payment terminal that accepts credit cards. When a user makes a payment using Samsung Pay, the app sends a signal to the payment terminal that simulates the magnetic strip on a credit card. This means that users can make payments using Samsung Pay even if the payment terminal does not support NFC.

Benefits of Samsung Pay

One of the main benefits of Samsung Pay is its convenience. Users can leave their wallets at home and use their smartphones to make payments. This means that they do not have to carry multiple cards with them, and they do not have to worry about losing their cards. Samsung Pay is also secure. It uses several layers of security to protect users’ information, including fingerprint authentication, tokenization, and Samsung Knox. Additionally, Samsung Pay offers rewards to users who make payments using the app. Users can earn points for every transaction they make, and they can redeem these points for gift cards, Samsung products, and more

Final Words

Samsung and Apple are arch rivals, thus it is not a surprise that Samsung is responding to Apple’s deeds. Indeed, the payment platforms from both companies offer almost the same services. Thus, it is unreasonable for card issuers to pay for one and get the other for free. Samsung Pay is a convenient and secure way to pay using your smartphone. It is active in more places than any other mobile payment service out there, and it allows users to store their credit and debit cards, as well as gift cards and loyalty cards, in one place. Samsung Pay uses several layers of security to protect users’ information, and it offers rewards to users who make payments using the app.