The promise of digital transactions isn’t just about, well, going digital, it’s about convenience. Why carry a wallet when you can pay with your phone, right? Unfortunately, this isn’t always the case.
The demonetisation of Rs 500 and Rs 1,000 notes in November unceremoniously shoved a majority of Indians towards digital payments and forced the inadequacies of the format onto us.
For starters, there are just so many apps to manage. Do you use Freecharge or PayTM? Maybe NetBanking will do. How about Ola Money? These apps can’t talk to each other, transferring money isn’t easy unless you’re on the same platform and the process isn’t as simple as reaching for your wallet and taking out some cash. Moreover, not all merchants support the platform that you’re using.
If you’re like me, busily trying out every single digital payment app, it’s likely that you have a bunch of loose change laying unused in apps that you’ve stopped using.
Even today, credit/debit cards (CC/DC) are still more convenient than using digital wallet services in lieu of cash. Aadhaar and UPI and the like seek to sort these issues out, but widespread adoption hasn’t happened yet.
Samsung Pay, on the other hand, is a glimmer of hope on the horizon. While the name suggests that the service is limited to Samsung phones only, and it is, you can still use it to pay any merchant that accepts your regular CC/DC.
So how does it work?
It’s very simple. You create an account, link a CC/DC by simply scanning it or entering the details manually and there’s a card verification process. All of this only needs to be done once. To pay, you simply swipe up and scan your fingerprint to pay with your default card or swipe up, swipe to your card of choice and scan your fingerprint.
Unlike other digital wallet services, Samsung Pay uses NFC and MST (Magnetic Secure Transmission) for payment. I think the latter is very important as it enables you to use Samsung Pay at any merchant that accepts your traditional CC/DC.
Apple Pay and Android Pay rely on NFC, which would require merchants to upgrade their POS systems and related hardware. This is not cheap.
If anything, I think Samsung Pay is showing us the way for future digital payments.
That said, there are some restrictions. Aadhaar-enabled payments are simpler to implement and don’t even require a smartphone. This is, of course, better for mass adoption. Another issue is that Samsung Pay is limited to specific Samsung phones, so it’s more a luxury than a convenience.
Despite that, MST on a smartphone is, I think, a bigger deal than just a digital payment option. I’d certainly love to see this feature as standard on all Android and iOS devices going forward.