Tokenization & Authentication
The first thing you need to understand about Samsung Pay and Apple Pay is that the underlying technology is virtually the same thing. Both use a tokenization process that allows your store credit and debit cards in your phone to keep their card numbers private and instead send a digital ID, or token, to the merchant’s terminal. This token pretty much ensures no one can lift your card details during transfer. The tokenization system in both Pay platforms is the Mobile Digital Enablement System (MDES) built by MasterCard.
On top of tokenization both Apple Pay and Samsung Pay require that any payment is confirmed by fingerprint identification. This biometric ID is how your phone knows it’s you making the transaction and not someone else. On an iPhone you use Apple’s Touch ID; on a Galaxy S6 you use Samsung’s new and improved fingerprint reader. I say “improved” because you simply now only have to tap your finger to the reader on the S6 instead of needing to swipe it along the reader as you did on the S5.
When we talk about the way both Pays transfer your card details is when the two systems begin to diverge. Both support NFC, but Samsung Pay goes a step further by supporting a system called Magnetic Secure Transmission, or MTS. If MTS sounds familiar it’s because it’s how credit and debit cards have been transferring your data for decades: by magnetic stripe swipes.
So in addition to an NFC chip Samsung devices that support Samsung Pay also have a special wire inside the phone that enables them to send a MTS transmission to any magnetic card reader. So even though you don’t need to swipe your phone (how awkward would that be?) you can use Samsung Pay at any terminal that accepts swipe cards. Simply hold your phone near the magnetic card reader and the MTS wire inside the phone will transfer the data just as the magnetic strip on the back of your physical cards do.
Apple Pay is only supported on the iPhone 6 and 6 Plus for terminal payments and on the latest iPad Air 2 and iPad mini 3 for payments made in apps. Apple Pay will also be supported on the Apple Watch. Samsung Pay is only supported in the Galaxy S6 and Galaxy S6 Edge.
Supported Credit and Debit Cards
Both Apple Pay and Samsung Pay are supported by the biggest card issuers including Visa, MasterCard, and American Express.
As of today over 90 banks and credit institutions support Apple Pay. Apple Pay has the advantage here as the big banks like Chase and Capital One support it as well as many smaller, local banks. Samsung Pay, when it launches this summer, will only support bigger banks like Chase and Bank of America at launch but, as with Apple Pay, is expected to add more institutions as time goes on.
This is an area where Samsung Pay is going to have the clear advantage. Why? It’s thanks to their support of MTS. NFC is still a fledgling technology and many merchants simply don’t have terminals that support it. But virtually EVERY merchant supports MST. Right now Apple Pay is only supported at about 200,000 stores in the US (including major chains like McDonald’s, Subway, Walgreens and more).
Samsung Pay, theoretically, on the other hand will likely be supported at all those stores and millions more thanks to MST. But MST should matter less as time goes on. Laws are coming into effect in the US this year that will require merchants to upgrade their terminals with newer NFC technology, so Apple Pay’s locations will grow. Still, it’s nice that Samsung Pay is “backwards compatible”.