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Samsung Pay to Launch September 28 in U.S. But Will Businesses Accept It?

Samsung will count on shoppers to educate business owners on the fact that their systems are in fact compatible with Samsung Pay.

Vjeran Pavic
Jason Del Rey has been a business journalist for 15 years and has covered Amazon, Walmart, and the e-commerce industry for the last decade. He was a senior correspondent at Vox.

Samsung plans to announce today that it will roll out its mobile wallet next month, but there are still open questions about how stores will treat a new type of payment method they haven’t seen before.

The tap-to-pay method will launch in the U.S. on Sept. 28 and come preloaded on the Galaxy S6 Edge+ and Galaxy Note5 on all major carriers except Verizon, which is still in talks with Samsung. A software upgrade will allow current owners of Galaxy S6 and S6 Edge devices to access Samsung Pay, too.

In the weeks leading up to today’s announcements, Samsung execs have boasted that Samsung Pay will work at many more stores than Apple Pay and Google’s forthcoming Android Pay, since it includes a technology that works with both old and new checkout systems.

Apple Pay and Android Pay transmit payments to a store’s checkout systems using a technology known as NFC, while Samsung Pay employs a wireless technology that mimics a card swipe in addition to NFC. That means even older machines that do not support NFC can still accept Samsung Pay. Users swipe up to view the card they want to pay with, authenticate by pressing their fingerprint to the home button or by entering a password, and then tap the device against the payment terminal.

The technology’s creator, George Wallner, told Re/code in a recent interview that he hasn’t used a traditional credit or debit card in eight months and has instead been relying on Samsung Pay for more than 5,000 transactions.

Samsung Pay exec Will Graylin said in an interview that the method will work on the “vast majority” of payment terminals, with one of a few exceptions being gas pumps. He declined to give a specific percentage of total U.S. locations where Samsung Pay will work. The electronics giant bought the startup Wallner and Graylin co-founded, LoopPay, for around $250 million earlier this year.

Whether Samsung Pay works most places where a card can be swiped is only part of the challenge, though. The other is convincing business owners that a customer is able to — securely able to — pay with their phone in a store that has an old checkout system and doesn’t accept NFC. One can imagine a scenario in which some business owners will insist that they don’t accept mobile payments and try to prevent a transaction from happening.

Graylin said Samsung will work with partnering banks whose cards will appear in Samsung Pay to try to get the word out to merchants. But Graylin and other execs also acknowledge that Samsung will count perhaps even more on shoppers educating business owners on their own.

“The first time the owner is the most resistant,” Samsung Pay co-GM Thomas Ko said at a press event, citing a beta test in South Korea. “The second time, no problem. The customer trying is the biggest education.”

Samsung Pay, then, will in many cases be the test for whether the customer is always right.

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