Samsung Pay expands to new countries while Apple Pay faces system overload

Samsung Pay is expanding to three new countries this year and is looking to add new features for its US users, while Apple Pay's launch in Japan took off to a rough start.

Samsung is bringing its payment solution Samsung Pay to a bevy of new countries including Malaysia, Russia, and Thailand, according to an announcement made by the company on Wednesday.

The Samsung Pay service, which competes directly with Apple Pay and Google's Android Pay, will be available in 10 countries by the end of 2016.

Coinciding with this news is Samsung's global partnership with MasterCard's digital wallet service MasterPass, which will see the electronics company rolling out an online payment and express checkout solution through MasterPass from early next year.

"By partnering with MasterPass in the US and rolling out online payments globally, we will simplify the online transaction experience by eliminating the need for customers to fill out tedious online checkout forms, remember long passwords or fumble for their wallets," said Thomas Ko, VP and global GM for Samsung Pay.

Currently MasterPass is being used by "hundreds of thousands" of merchants in 33 countries around the world, with MasterCard planning to add three new countries to MasterPass' roadmap by the end of the year.

Samsung Pay chose its home country of South Korea as its first launch location in August 2015. It has since processed over 2 trillion transactions and $2 billion in payments in South Korea alone, with online payments accounting for more than 25 percent of the transactions, according to Ko.

Initially, Samsung Pay was designed so that consumers would be able to create a digital wallet on their Samsung smartphones by entering their credit card information. From there on, they would be able to pay for purchases by tapping their smartphones on a point-of-sale device equipped with compatible wireless technology to facilitate transactions.

Moving forward, Samsung Pay will provide consumers with an online payment platform that allows them to checkout from any device.

The company also announced that new features would be added to Samsung Pay -- including support for in-app payments and location-based deals -- as part of a long-term goal to move beyond payments technology to a broader commerce platform in the US.

From November, users in the US will see a new "deals" feature within the Samsung Pay app that will offer discounts and coupons for nearby stores, and redeem those deals instantly without having to upload anything or have an existing membership or loyalty card.

Yesterday, Google also announced strategic partnerships with Visa and MasterCard that will allow Android Pay users to pay on "hundreds of thousands of new sites" where Visa Checkout or MasterPass are accepted and with their preferred device authentication method.

Google claims Android Pay can be used in any place with a contactless terminal and currently works across 1 million locations in the US.

In addition to the US, Android Pay is available in the UK, Singapore, and more recently Australia.

Meanwhile, Apple Pay is now available in 12 countries, with its latest launch target being Japan.

Alongside the release of iOS 10.1 and watchOS 3.1 yesterday, Apple activated Apple Pay in Japan, one of Apple's largest markets but also a market that prefers to use cash over card and other online payment methods.

The service is available for use at all locations that accept QuicPay and the Suica prepaid money card that's used predominantly on public transport.

Suica is based on Felica technology, a near-field communication (NFC) based contactless payment system developed by Sony. To use a Suica card with Apple Pay, customers in Japan will need to add their Suica card to the Wallet app, after which they can use their iPhone 7 or 7 Plus in place of a standard card.

While Felica is used to process more than 160 million transactions across 2 million payment terminals in Japan, it is not compatible with the systems used in most other countries. Apple had to equip iPhone 7, iPhone 7 Plus, and Apple Watches in Japan with a different NFC chip to support Felica.

Travellers from other parts of the world won't be able to use Apple Pay in countries like Japan, Hong Kong, and Singapore because of their reliance on Felica.

The Japanese model of the iPhone 7, iPhone 7 Plus, or Apple Watch Series 2 is required to make purchases in stores and at transportation facilities in Japan.

The iPhone 6 and subsequent iPhone models, as well as iPad Pro models, the iPad Air 2, and the iPad Mini 3 and later models, can only be used to make payments within apps and on the web.

Apple Insider reported that Apple Pay will support Japanese cards from American Express, JCB, MasterCard, Aeon, Orico, Credit Saison, SoftBank, D Card View Card, MUFG Card, and more. However, Bloomberg's report indicates that some cards issued by American Express, D Card, and MUFG are excluded for the time being.

Apple Pay's debut in Japan didn't go as smoothly as anticipated, with reports saying that commuters in Tokyo were struggling to register their Suica cards onto their iPhones. East Japan Railway Co told Bloomberg that Tuesday's problems were due to the large number of attempts to access the service.

Apple Pay has also faced problems in Australia. The Commonwealth Bank of Australia, National Australia Bank, Westpac Bank, and Bendigo and Adelaide Bank have been seeking non-exclusive access to the NFC chip, standardised security for all mobile payments systems, and price transparency on transaction costs within Australia -- the last of which is a policy of the Reserve Bank of Australia.

However, Apple argued against this access on the grounds that it would "undermine the availability, security, and privacy" its customers expect when using Apple devices to make payments.

The banks had requested interim authorisation for the ACCC to allow them to commence collective negotiations on some issues while the regulator considered the application for final authorisation. However, the ACCC then refused to grant the banks interim authorisation to collectively negotiate, saying it needed more time to come to a decision.