Samsung is set to launch its mobile payment service in competition with Apple and Google.
It has also launched two new smartphones to ramp up its efforts to win over consumers seeking large-screen handsets.
The moves are aimed at keeping the South Korean giant on top the global smartphone market and countering US rival Apple, which has made gains with its large-screen iPhone 6 and 6-Plus and its tap-to-pay feature.
At a New York media event, Samsung unveiled its Galaxy S6 edge+, the latest update for its flagship device, and Galaxy Note5, its main device in the “phablet” market.
“Today the journey continues in the large-screen category that Samsung created,” said JK Shin, Samsung’s head of IT and mobile communications.
The company also announced that its Samsung Pay service would roll out in South Korea on August 20 and in the United States on September 28, and that it would launch in Britain, Spain and China with partners to be named in each market.
Unlike rival contactless payment systems like Apple Pay and Android Wallet, Samsung Pay does not exclusively use NFC technology to communicate with credit card terminals.
Instead, it relies on a technology called magnetic secure transmission (MST) to pass along the information in a card’s magnetic strip to terminals already used by retailers. This means a phone using MST can be used to purchase items at nearly any payment terminal.
The expense of installing NFC-compatible terminals has prevented many retailers from adopting the technology, hindering the use of mobile wallets.
Shin said he expects wide adoption because Samsung Pay “doesn’t cause small business to upgrade their terminals and will be accepted almost everywhere on day one.”
Even though Samsung talked up MST, its payment system will also work with NFC.
Samsung Pay will come installed on the company’s latest smartphones, the Galaxy Note 5 and Galaxy S6 edge+. Starting in the middle of August, a software upgrade will let Galaxy S6 and S6 edge owners in the US and South Korea install Samsung Pay.
Instead of exchanging credit card details with a terminal, Samsung Pay uses tokenization to pass along a temporary code, a system found in other contactless payment systems. Customers use their fingerprint to confirm a purchase.
Samsung is working with South Korea’s major credit card companies on incorporating Samsung Pay into payment networks. In the US Samsung will work with credit card issuers like American Express, Visa and MasterCard as well as large banks, including Chase and Bank of America.
At least one US credit card company has already said it is supporting Samsung Pay: Discover customers will be able to use Samsung Pay at some still undetermined point in 2016.
Technology companies are not the only ones developing contactless payment systems. Merchants including CVS and Walmart are part of a retail group building its own mobile wallet called CurrentC.
