Samsung Pay launches in Australia promising more 'value-added' services

Samsung has said the launch of Samsung Pay in Australia is only the first of many value-added services it plans to bring as part of its service strategy.

Elle Kim, vice president of head of global business development for Samsung Pay, said during the launch of Samsung Pay in Australia on Wednesday the company plans to go beyond offering customers the ability to just pay with their smartphones.

"We want to replace your wallet, we want to go beyond payments, and go into things like gift cards. We also think about who we are as a company, and so when we talk about providing cool payment services, we are starting already to think about how we can pull together all the different things we do from the consumer electronics point of view," she said.

"In the US, we made this announcement where there's a refrigerator where you can order stuff and there are payments built into our refrigerator, so as we look into the future how we do services and payments will go beyond Samsung Pay. Samsung Pay is our first entry to earn us the right to the trust of our consumers."

Kim added other services in which the company plans to expand into -- all while it grows its partnership ecosystem -- includes integration of loyalty cards, gift cards, and transit. She said it is part of the company's mission to be the "most partner friendly" company.

She noted Samsung Pay has been built using near-field communication and the company's proprietary technology known as magnetic secure transmission (MST) makes the payments solution widely acceptable.

"As we start launching in different countries, not only do we want to create localisation to make sure it's relevant to their customers, we want on a global basis to keep adding features. I think if all we do is tap, most people will think 'Hang on a minute, my card does that', so we need to figure out how to innovate and bring more value to consumers," she said.

The launch of Samsung Pay in Australia marks Samsung's fifth market. The payments solution has already been launched in Korea, the United States, China, and Spain, with Samsung planning to make the feature available in Singapore tomorrow, as well as the United Kingdom, Canada, and Brazil by the end of the year.

Samsung Pay has named American Express and Citibank as initial launch partners in Australia.

Alan Machet, Citibank Australia cards and consumer lending managing director, has acknowledged Citibank's decision to partner with Samsung will further enhance the company's digital offering.

"Citi's strategy and its global consumer bank strategy is to be a leading digital bank. We think absolutely Samsung aligns to that. It's more than just a payments solution. We find 80 percent of the credit cards in Australia are acquired online, with half of those acquired through a mobile phone. So we're seeing more and more consumers are using their mobiles to really live their lives and we think Samsung Pay is going to be important in that ecosystem," he said.

Similarly, Nick Alexander, American Express JAPA vice president payment consulting group, believes Samsung Pay will bring added convenience to its customers, in particular tech savvy millennials, who have had access to rival Apple Pay since it launched in Australia last November.

"American Express is uniquely placed now that we have digital wallet offerings with the two most popular phones in the market in Australia. As the launch partner of Samsung, we're proud to be leading the industry and solution to the market. This now means we're able to offer a digital wallet option to 90 percent of our customers that engage with us on their smartphones today," he said.

Alexander added that the partnership with both Apple and Samsung will give customers the option to choose which platform suits them rather than have American Express "dictate which phone they should use".

Kim said the decision to launch with American Express and Citibank carries on from the relationship the companies already have together globally, assuring that Samsung is working closely with other financial institutions, including Australia's four major banks, to integrate Samsung Pay.

Prasad Gokhale, Samsung Australia IT and mobile vice president, however, assured Samsung Pay has not been designed to compete with banks, but to complement them, despite the fact that banks such as Commonwealth Bank already have features such as loyalty card integration within their CommBank app.

"Our philosophy about working with the local banks is very simple: We want to leverage what they have done. If you look at the work we have done with tap and pay, we did not go and say drop this or drop that," he said.

"With Samsung Pay in-app experience we will work harder, and that's why it takes a longer time. The other thing I'll highlight is there is a lot of legacy infrastructure in place in this market that has to be replaced, and it's happening ... So I think with our local partners we don't seem to have any fights with them, it's very complementary and we're extending the digital transformation by helping the customers to do more mobile payments on the go, and we're going to bring more CRM to a larger portion of customers."

According to Kim, Samsung Pay has been designed to emulate the motions people would go through if they were physically taking their cards out of their wallets. Customers are able to conduct payments by swiping up on their smartphone to bring up their credit card, approving the payment through fingerprint authentication, and tapping the phone against a payments terminal.

Kim boasted that the security aspect of Samsung Pay has been well considered by Samsung, pointing out that aside from being built on Samsung's Knox security platform and relying on fingerprint authentication and tokenisation, Samsung Pay becomes disabled if the smartphone is jailbroken.

Samsung Pay is now supported on the Galaxy S7, Galaxy S7 edge, Galaxy S6, Galaxy S6 edge, Galaxy S6 edge+, and Galaxy Note 5 phones.

In April, ANZ Bank joined American Express on the Apple Pay bandwagon. ANZ Bank was the first major Australian bank to offer the solution to its 5 million Australian customers, saying at the time it would bring added convenience, security, and privacy.