Mobile Payments and Where the Technology Is Now

The next iPhone has been released, Samsung has dished out all their “galaxies,” and Google has showed of their “Nexus” Android flagship smartphones. But all these devices have one thing in common: they are all shipping with mobile payment technologies.

Mobile payment technology has come a long way from the early days of Google Wallet, but it is still based on NFC or Near Field Communication. NFC is way of transferring data seamlessly between two NFC chip readers (one would be in the phone and the other near the card swiping machine). This allows you to pay with your “virtual credit card,” which is stored in an application on your phone, instead of the real one in your pocket.

NFC is not only limited to payments. For example, on Android phones, which have NFC, you can transfer contact data, websites, emails, and other information by touching the two devices together -the experience is kind of like beaming data to someone else’s device.

The new iPhone 6S, which Apple recently released, is showing off the a slightly improved version of Apple Pay. Apple Pay is just like the NFC scenario, except the authentication for paying is more secure because it uses the fingerprint scanner of the iPhone to authenticate payments. Unfortunately, Apple Pay is only compatible with iPhone 6 and iPhone 6S because these are the only two iPhone models that have NFC.  

Meanwhile, Google has rebranded Google Wallet to “Android Pay” to make the payment system more unified for the Android ecosystem. It now allows any phone with NFC and fingerprint scanners to seamlessly work with its payment system.  In 2011, Google Wallet was the first mobile payment system, but it never gained momentum because most people didn’t trust Google with their credit card information.

On the other hand, Apple launched Apple Pay in 2014 and has been credited and even praised for being very secure with user data. This helped start the widespread adoption of NFC payment systems not only for users but also for retailers.

Watching its competitors like it traditionally does, Samsung took mobile payments one step further to make the system universal. Even by today’s statistics, NFC payments only cover 10 percent of the world’s retailers—still not widespread, but much better than what it was in 2011. Samsung combined the power of NFC with Magnetic Secure Transmission, or MST. MST is a chip that can be placed in a device like a smartphone, which allows it to transfer money from the payment application on your phone to a regular old magstripe credit card reader.

Adding to the fact that Samsung Pay already allows NFC payments with fingerprint authorization, the addition of MST makes for the first true complete solution for mobile payments. Samsung Pay is the basically the best of Android Pay and Apple Pay.

There is a drawback, however: Samsung Pay does not support J.P. Morgan Chase Bank credit cards. But because Samsung phones are Android phones, they can also use Android Pay, which accepts all credit cards.

Mobile payments have come a long way from the days of Google Wallet’s launch in 2011. Apple and Android Pay offer solid mobile payment systems, while Samsung Pay offers a complete solution. As the next generation of mobile phones come out and people adopt this system more, the future of payments may well be smartphone NFC/MST payments, making credit cards obsolete.