Apple Pay, Android Pay, Samsung Pay; Which Is Best For NFC Transactions?

NFC - Near field communication
by Intrepid Payment Processing

Have you entered the new world of mobile financial transactions yet? Your options for transferring money at the speed of light have never been better. Apple Pay, Android Pay and Samsung Pay are all mobile point-of-sale financial systems, but which is best for NFC transactions?

How Does Near Field Communication (NFC) Technology Work

Apple, Android and Samsung all depend on the development of the Near Field Communication (NFC) technology to function. Both the smart phone and credit card terminals must have microchips that recognize each other during an “air swipe” inches (or centimeters) away.

Problem: Cost
New NFC-enabled credit card terminals could cost up to $500. When the economy is struggling, it is difficult to justify the addition of “new technology.” Gradually, Chinese credit card terminals are coming on board, but it takes time.

Solution: Incentives
The smart phone manufacturers are offering incentives. Apple, Android and Samsung all support the same “tap to pay feature.” The technology can be loaded onto bracelets, watches or smart phones for all three brands.

Special Apple Pay Features

Brand recognition is the greatest appeal of Apple Pay. There are more than 2,500 banks and 700,000 retailers that have signed up with Apple Pay as of March 2015.

Potential Problems with Apple
There have been reports of identity theft with Apple Pay. And three of the top retailers, have not signed onto Apple Pay, they prefer the Merchant Customer Exchange (MCX) group technology. Apple Pay is limited to the iPhone 6, iPad Air 2 and iPad Mini 3.

Special Android Pay Features

Google is the lead search engine and continuing to expand into other areas with Google Lens and self-driving automobiles. But perhaps, Google is trying to juggle too many balls at the same time. Android’s platform flexibility is a key advantage over Apple or Samsung. Google Pay also claims to have 700,000 retailers signed up as of March 2015.

Potential Problems with Android
When customers are struggling to migrate to a new technology, you don’t want to make changes. After spending money on Google Wallet, this brand has been incorporated into the Android Pay system. Android Pay uses a fingerprint sensor.

Special Samsung Pay Features

The Samsung Galaxy S6 offers both the Samsung Pay NFC payment system as well as the standard magnetic stripe swiping system. The LoopPay Magnetic Secure Transmission (MST) technology allows the Samsung mobile devices to be used at more than 30 million retail locations.

Potential Problems with Samsung
The Samsung Pay app only works with the Galaxy S6 and Note 5 models. Samsung also includes a fingerprint sensor.


Copyright 2015 Intrepid Payment Processing

Will Magnetic Stripe Cards Ever Go Away?

by Intrepid Payment Processing

One of the moIMG_3449_lbst important mile stones in the history of payment systems in the United States arrived without much fanfare. On the first day of October 2015, the Europay, MasterCard, and Visa (EMV) standard became legally significant through what is known as the liability shift. As banks, merchants, consumers, and payments processors begin to implement the new system, one of the questions we are constantly hearing is: How long until the old magnetic stripe system goes away?

The days of the magnetic strip (magstripe) are far from over. Although the liability shift from the issuer to banks and merchants should be a strong motivator for everyone in the payments industry to adopt the EMV chip system as soon as possible, we will probably see the magstripe for a few more years.

The Strawhecker Group, a management consulting company based in Omaha, recently conducted a survey on American EMV adoption. The survey indicates that only about a quarter of all merchants were ready for EMV on its official October 1 date. The forecast at this time is that less than half of all merchants will be EMV compliant 12 months from now.

Although the liability shift is a pretty serious matter since it has the potential of affecting the bottom line of banks and merchants, there is no clear mandate to perform this upgrade. For this reason, we believe it may take a few years until the magstripe becomes a thing of the past, and the transition will be similar to what Microsoft has encountered with its Windows XP operating system.

Despite Microsoft’s efforts to convince users of the risks of using Windows XP, recent statistics published by data analytics firm Net Applications indicate that millions of people are still using the old operating system, which is installed in more systems than Apple OS X, Linux, and even the new Windows 10. The Windows XP stalwarts use it because it works, and thus they are in no immediate rush to upgrade.

With more than a billion magstripe credit and debit cards currently in circulation in the United States, issuers have a major task ahead of them in terms of switching cardholders over to the new EMV chip system. Furthermore, there are more than 10 million card readers in operation that also need to be replaced. This is a major undertaking, and there is one more factor to consider: the magstripe will be the system of last resort until full EMV adoption is complete.

Starting October 1, 2015, if a magstripe cardholder wishes to complete a retail transaction where an EMV card reader has been installed, a magstripe transaction will take place. Because this is a system that still works, we think it may take a few years before it goes away completely, similar to Windows XP.

Copyright 2015 Intrepid Payment Processing