Samsung Pay Already Has More Than One Aussie Bank On Board

Samsung Pay is coming to Australia. Some time this year, we'll see yet another contactless payment system that lets you use your phone to buy groceries or shop in stores. Samsung's attempt, though, seems to be the most versatile and powerful yet for customers, and potentially the most trouble-free for banks to implement.

The payment infrastructure in Australia is markedly different to Samsung Pay's launch market of the US. Where the US is still heavily reliant on MST -- Magnetic Secure Transmission, the passive magnetic strips on cards -- and has small penetration of NFC card readers, Australia's chip-and-PIN systems and the launch of VISA PayWave and Mastercard PayPass means the country is primed for payments via smartphone. Even smaller institutions in Australia like Credit Union Australia often already have contactless payment apps for Android.

That means the appeal of Sammsung Pay is not purely in replacing the average RFID/NFC chip-and-PIN-enabled credit or debit card from Australia's banks. There is a convenience factor -- it's quicker -- but the fact that it's easy, not just for customers but for card providers like Cuscal or individual banks to implement, with no costs beyond app development and the ongoing service expense of supporting another payment method in a crowded marketplace.

Using Samsung Pay is straightforward. From a locked, powered-off screen, swiping up from a Samsung phone's lock button across the lower half of the screen launches Samsung Pay within half a second, displaying a carousel of registered cards. Tap your (registered) fingerprint on the physical home button, and the NFC chip will activate, opening the phone to communicate with a NFC card reader and submit a payment for the net 15 seconds.

Samsung went to pains to say that customers' data is not harvested by Samsung, and any payment data that is captured is only limited -- like transaction records -- and only then after specific agreements with individual banks. American Express, for example, shares full transaction records with Samsung Pay to make it easier for customers to monitor any payments made from their accounts. Others share only transactions made through Samsung Pay.

Thomas Ko, Samsung's global vice president of mobile payments, told Gizmodo that the chief appeal of Samsung Pay to banks and card providers was that the company didn't take a cut of payments made through the system -- it was acting purely as a middleman in creating its Galaxy Note 5 and other phones as payment hardware, and that the sovereignty of the data always remains with the banks with Samsung being merely a custodian.

Prasad Gokhale, Samsung Australia's vice president of IT and mobile, said the company is working locally with banks in the lead-up to the local launch, and already has more than one confirmed as supporting Pay, with more in talks. The company is vehement about how seamless it wants to be in its integration of Pay; it's willing to work with banks' existing apps, whether they're simply for account management and balance checking, or whether they already offer NFC payment options.

The usability of Samsung Pay, on a compatible Samsung smartphone, needs software and hardware alike to be free from hacking or interference. Samsung Pay requires the company's secure off-SoC Knox hardware, and currently the Galaxy Note 5 is one of few phones with official support for the service, alongside the mid-range Galaxy A3, A5 and A7. Ko told Gizmodo that the company was investigating expanding the service to the Galaxy S6 in Australia, where it has enjoyed excellent sales and has the necessary hardware but is not officially supported yet.

One of the major parts of Samsung's necessary deal with banks is in setting up a system whereby a single-use authentication token is created when Samsung Pay is launched and used. That token is encrypted, and many banks also use time-based expiry to further protect each payment against potential hijacking. It's not impossible for a dedicated individual to 'hack' a Samsung Pay device -- nothing is impossible -- but the reward is extremely limited in scope if only a single payment can be made.

When it launches in Australia, Samsung Pay should present strong competition to Apple Pay, as well as the less system-level integrated device-agnostic Android NFC apps of Australia's major banks. Whether it properly takes off remains to be seen, and will depend primarily on how many banks and card providers Samsung can get on board before and in the early stages of the launch, and whetehr the company can convince consumers to ditch their cards and use a phone instead.

Campbell Simpson travelled to CES 2016 as a guest of Samsung.



    Oh that's so much better than the system I use with my Samsung phone with westpac (sic). With a locked screen, I just hold it over the terminal and its done.
    Why would Samsung bring out a convoluted way to pay for things. The system I have now shits over Samsung pay. Maybe they want their phone pay system to be finicky like Apple pay.

      I don't get it either, maybe it's a security thing? But if it's this much effort to pay with my phone, I'll just stick to using a wallet and bank cards.

        It's not really much more effort than tapping a card - plus you have balance and transaction records, etc. So it's like card + phone app, but on your phone in one place and from the lock screen. And really, fingerprint auth is way safer than a bank card anyone can nip and tap away $100 after $100.

          I use it from time to time with the Commonwealth tap and pay app, usually if I'm transferring some money into a different account or already have my phone out for something else. I did use it at Subway once, where the "sandwich artist" informed me the I should never do that and that he was a hacker who could now empty my bank account if he wanted. Haha.

            It doesn't look that complicated. And I have several cards (personal, joint, credit, work) so the carousel of registered cards sounds awesome.

            Would it work with loyalty cards for cafe's etc?

              Definitely the plan. Anything that swipes MST or taps NFC will theoretically work, and a loyalty card might not even need either. The only problem is the outlet itself not having the resources to make a Samsung Pay app/agreement with Samsung.

                How does it work with Gear S2?

                  Possibly a PIN code entered on screen

                  I'm not sure, never seen it work

                  A pin on the S2 would be counter productive. Screen is too small to really make it a simple enough option. If you mean a pin on the phone, then thats making the S2 irrelevant to the process. What benefit is there to using the watch for NFC stuff if you have to pull the phone out anyway?

                  It'll be something I'd be keen on trying, and as I have a S2, its something I'm interested in finding out as well.

          You can do that already but you don't need to open the app. You don't have to wake the phone either. This is just adding extra steps.

      What level of authentication do you provide when making a payment? Is it the same as a chip-based credit card where it requires no PIN under a certain amount? If so, what's the limit and how do you authenticate after that?

        It's 100 bucks and the exact same as with your normal card.

        I don't know about Samsung Pay, but for Apple Pay the fingerprint serves the purpose of a PIN and as a result they have removed limits from the contactless payment made by an iPhone. Used my phone in a $1300 or so transaction over the holidays.

        If Samsung is using a fingerprint, which it sounds like it is, I'd assume at least some parties won't bother asking for a PIN as well.

        Last edited 10/01/16 9:58 am

    Hmm, I wasn't aware that tap-to-pay already existed on Android phones in Australia. Is it only some banks that allow it?

    As far as I'm aware, my bank (ANZ) only allows account management.

      Yeah, I use my Credit Union Australia app (redi2pay) to NFC all the time. Surprisingly enough it even works over here at CES in Vegas. Only problem is it is a bit finicky with devices, it thinks my Z5 Premium is rooted when it's not (and it won't run on a rooted device).

      Westpac and Samsung are in bed as Samsung uses an older style of NFC authentication. Westpac refuse to believe all new Android phones are capable for the last few years with modern NFC auth backed right into Android.

        It's because the other manufacturers won't as the security chip to the NFC but Samsung and nexus phones have the necessary chip. Don't blame westpac or Samsung. It's the others that won't jump aboard.

          All devices that have NFC have the required hardware. Samsung goes a different route. They have a special security chip with their NFC. They are the ones who hold the keys to it. They have supplied the keys to Westpac (not sure if anyone pays for this or the specifics).
          That is why the Westpac app will only work with Samsung phones. You can verify this by visiting the Westpac app page on the Play Store.

          Google realised it was stupid for everyone to have their own keys so they set Android to be able to emulate the secure element entirely in the software. It's called HCE (Host Card Emulation). It was added several versions ago. This allows any app, like Commbank to use NFC payment with any device (with NFC).

          I've contacted Westpac about this as I would like to use Tap and Pay on my Nexus and they have confirmed that they are not looking at adding support any time soon. They app description used to specifically say that we do not support phones such as Nexus and others but it seems they have removed this.

            Maybe westpac changed things. I was pretty sure that you could use nexus phones. Maybe it was commbank.

      Commbank's app works, it's a little slow (you have to enter a pin first), but it's device-agnostic, any Android phone with NFC is compatible, and it has the same kind of security as apple and Samsung pay (that is, card tokenisation.) I use mine practically every day.

        Get a phone that reads your fingerprint.. The CBA app is awesome, love cardless cash

        Last edited 10/01/16 7:46 am

          I do, they don't have fingerprint support yet for Android, but I think tap&pay is a pretty good tradeoff.

    I don't see the novelty of this. Can you really go with no cards at all to make this worthwhile? You always have to have your drivers license when driving, many need a swipe card to go to work. So whats one extra bank card? The banks app can show you the transaction. For CBA they appear in seconds.

    Handy maybe, but not really a must have.

      You can leave your drivers license in the car. Some places are going digital with them though.

      When I go surfing I don't carry anything but my pebble watch, which has the waterproof guts of a paytag sewn into the lining of the strap.

      I can go straight from the beach to the surf club for lunch, without having to leave my wallet on the sand. The passive nfc payment is perfectly reliable these days, and it works just about everywhere.

      My old galaxy s3 worked natively with the commbank app, but it was never as convenient as paying from the wrist.

      Last edited 08/01/16 9:46 am

        This is brilliant.
        Ever since nfc payments were a thing I've wanted a smartwach with payment capabilities (or a pay tag embedded in my hand :P). Pay tag in the watch strap is a great idea in the mean time.

          I used acetone to get the gigantic card out of the way, then laminated the chip core into a narrower sheet which I heated over a curling iron to give it a natural wrist curve. It fits in a 20mm strap and is super thin.

          I was thinking of putting a go card in the other side, but I haven't caught public transport in years.

          Still, watch pointing up for money, watch pointing down for transport. It's pretty elegant.

          Now if we could just do away with carrying licenses...

            I have a photo of my licence in my phone which I've used successfully at checkpoints twice..
            It's only the number and photo they want, show them you've made an effort to comply and it's usually ok

            Usually.. No doubt one day I'll meet Mr Respect Mah Authoritah'

              In victoria they're thinking of bringing in digital drivers license making this even easier.

                They're already starting to do it in NSW for licenses other than a driver's license (marine license and some other stuff)

    Anyone read any good articles that compare/contrast this with Apple Pay? Interested in the security perspective.

      Single use time based token, pretty safe. If you use your card, it's safer than that.

        Is that the same as Apple Pay then?

          Not sure, I haven't really looked into Apple Pay but probably. Both safer than using your card.

          Essentially the same idea. One isn't really 'better' than the other, although Samsung *does* have an edge in that it'll work on non-NFC card readers.

    So they are happy to support this, but not Apple pay?


      From the sound of this article, Samsung isn't seeking a fee to be paid back to them for harbouring the transaction. Whereas Apple pay does seek an interchange fee for making the transaction, which is why banks are playing hard ball with Apple, don't want any money they can make taken away from them

        Yep, I imagine this is the big reason. There's possibly a few other factors then that come into play such as Australia's banking revolving around for main banks controlling 80 - 90% of loans where from what I gather of the US, it's a far more broad market in terms of players and none have the market share of our big four. That likely gives the AU banks a lot of power when it comes time to negotiations, and even if small banks jump on board, there likely isn't a lot of pressure being felt to keep up with them or at least not to act particularly quickly. They can afford to sit on the sideline, watch Amex and see how customers react to the offering. The small number of players factor goes both ways though and if Apple does make a deal with even two of them they could reach over half the population very rapidly without having to sign a lot of deals. In the US I think they're well over the 500 mark at a glance ( now for financial institutes they have on board to put the market differences in perspective.

        Regarding the fees, the AU banks make a smaller percentage on those fees than the US banks do by about half, and so there's less margins there for them to play with, particularly if Apple starts negotiations out by asking for the same rate as they do in the US. I read in one Article UK banks probably pass on half as much to Apple as US ones do, but there's probably some lengthy negotiations before that or any figure can be reached.

        Last edited 10/01/16 10:43 am

      Apple Pay also requires new hardware. Samsung Pay/Android Pay/Google Wallet/Android apps that use NFC/etc use existing Paywave/Paypass terminals.

        Apple pay uses the same NFC, no new hardware needed in Australia

        Apple Pay uses the same hardware as well. The one gotcha is with Amex (who are the one Apple Pay partner in AU), where not all terminals accept NFC based payments through Amex (Express Pay if I recall correctly), but that's true if you try and tap your Amex card as well so it's not an iPhone issue. For instance I've always had to insert my Amex card at my local EB games, but can tap my MasterCard.

        All the news about new hardware has been because in the US most retailers had no NFC terminals to begin with, so Apples name usually comes up in articles about companies rolling out new infrastructure due to Apple Pay being a big driver for the tech there. If you went to the same stores prior to those upgrades, Samsung or Google Pay wouldn't work either due to the complete lack of NFC.

        Last edited 10/01/16 10:07 am

    Why would they only have it available for the Note 5 and not the S6 range which they even admit is their best selling range? Or at least say it's a trial run not, omg look what we're doing so great (but only about 5 people will be able to use it because we're still looking in to how to get it to the VAST majority of the new phones we sold last year).

      Agreed, the news that Samsung Pay was coming to Australia interested me as an owner of a Galaxy S6... but suddenly I'm hearing this for the first time, that it'll not be supported initially at least? Seems quite odd to not go for the S6 range, if it has the capable hardware as they say it does...

    It's not just a question of NFC.... its the whole security arrangement from the phone all the way to the bank. Samsung provided the entire environment for this to happen.

    Simon, if my bank doesn't implement this, can I just get a reloadable Visa/Master card?

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