Samsung Pay has been tailor made for India, but will cater to only a small audience

Samsung finally announced its mobile payments platform in India today. Samsung Pay enables customers to make payments right from their Samsung smartphones. The service has been rolled out to various countries and quite honestly, the India rollout couldn’t have come at a better time.

I say that because back in November last year, the country was hit by ‘demonetisation’ to drive out black money and take a step towards being a cashless economy. The usage of debit cards, credit cards as well as online and mobile payment services saw a boom. Even today, I usually don’t carry cash simply because almost every shop and merchant has started to accept digital payment in some form or the other.

Samsung has taken advantage of demonetisation and in that process has left Android Pay and and Apple Pay behind.

Partners

Image: Reuters

To successfully launch the payment ecosystem in India, Samsung has partnered with various banks and financial companies including Visa, MasterCard, American Express, Axis Bank, HDFC Bank, ICICI Bank, SBI, Standard Chartered Bank and CitiBank. More banks are expected to be added to the list. This means that one can easily add a debit or credit card from any of the aforementioned names.

Not just banks, Samsung has also added support for Paytm on the Samsung Pay app, and it makes sense. Paytm has seen a high rate of adoption all over the country with the number of users jumping to 200 million last month. Even UPI or the Unified Payments Interface has been added to Samsung Pay. No wonder, the launch event saw NITI Aayog CEO, Amitabh Kant, making his first official Samsung Pay transaction.

How does it work?

A customer with a supported device needs to download the Samsung Pay app and set it up. The user can add upto 10 debit or credit cards, a Paytm account as well as their UPI account. The app offers three layers of security which includes fingerprint authentication, card tokenisation and Samsung KNOX.

According to Samsung, the platform doesn’t need any special hardware or device. To make a payment, the user needs to select the card, authenticate, punch in the amount and just bring it close to the POS machine. The smartphone sends magnetic waves to a POS machine thereby eradicating the need to carry any debit or credit card.

Similarly, the user can select Paytm or UPI to make payments. The app also supports NFC payments, but there are hardly any shops and merchants that accept NFC based payments in India.

Supported devices

Image Credits: REUTERS

Here is where the real problem begins. Samsung Pay is supported by limited devices. This includes the Galaxy S7 edge, Galaxy S7, Galaxy Note 5, Galaxy S6 edge+, Galaxy A5 (2016), Galaxy A7 (2016), Galaxy A5 (2017) and Galaxy A7 (2017). Consumers can also use the new Gear S3 smartphone to make payments. Now with such limited number of devices, the adoption is going to be slow and limited to users who own or will invest in any of the above mentioned devices.

This is because Samsung Pay requires certain hardware requirements, the most important being MST or Magnetic Secure Transmission.

Made for India

Asim Warsi, Senior Vice President at Samsung Electronics India mentioned how the company has been working since the past one year to bring Samsung Pay to India.

“The platform has been customised for India and we have taken our time and worked hard to make it right for our consumers. The combination of software and hardware is what makes the service unique. Other countries don’t have the option of adding debit cards or mobile wallets, it is limited to credit cards. For India, we have added more ways to pay because the adoption of debit cards and now Paytm and UPI is higher,” said Warsi.

When asked about whether more devices in the future will be launched to support Samsung Pay, he said, “There is a potential and we are working on it.”

In my opinion, Samsung Pay is an excellent way to make payments. Forget cash, I don’t have to keep my debit and credit card any more. And almost every shop offers the option to pay via card. But then I don’t own a Samsung device that supports the service, which is a big let down. Another thing that I noticed was that the service is limited to a few banks.

It’s a good step from Samsung and it has potential. But for now, it will only cater to a very small audience in the country.

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from http://tech.firstpost.com/news-analysis/samsung-pay-has-been-tailor-made-for-india-but-will-cater-to-only-a-small-audience-368200.html