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Difference between Mobile Payments modes NFC and MST

Mobile payment

Comparing MST and NFC Today

At the moment, mobile payment systems fall into two categories. One method is based on near field communication (NFC) technology. The other relies on magnetic secure transmission (MST) technology, which sends the payment card information to a magnetic card reader wirelessly, using magnetic signals.

NFC is the most widely used payment system, however, it has a critical shortcoming—fewer than 3 percent of retail shops in the world have the NFC readers needed to support it. Despite the technology applying NFC for payment systems being a decade old, retailers have been slow to purchase and install NFC readers, even in Europe, where NFC cards and IC cards are more widely available. Without a doubt, its acceptance will spread, but the pace appears to be somewhat slow.

On the other hand, most retail shops already have magnetic card readers, which are compatible with MST technology. So a mobile payment system that supports both NFC and MST would have the widest level of acceptance—and the only such service is Samsung Pay.

The global average NFC penetration rate stands at 15 %,  but in Korea its hardly 2 %. But because MST has a success rate of more than 80 %, it is essential for today’s consumers.

In the years to come, the number of transactions using NFC will grow steadily, but MST is going to continue to be significant in retail. Even after the percentage of shops using only MST drops to a small number, we cannot just ignore them. The right approach is to support both systems.

Having conducted thousands of tests around the world, I am sure that Samsung Pay will be a success. It is a product that can change the market and provides real benefits to users. No, it isn’t perfect, but it works so often that I haven’t been tempted to return to my credit cards. Most people have the same thinking—they are not going to use mobile payments just for the novelty, but only if they are convenient.

With this philosophy in mind from the beginning, Samsung Electronics applied MST technology to mobile payments together with NFC. I think debating which technology is better, NFC or MST, is pointless. What is essential is making mobile payment convenient for consumers, so they can pay for things without thinking about the technology. If consumers cannot use a mobile payment service in most shops, they will not use it nor accept it. Embracing a technology means being able to use it easily, anytime, anywhere.

What is Tokenization 

Using a token means people’s information is encrypted using our propriety technology and kept secure. Even if a transaction was intercepted, all the personal information would be protected.

Another benefit of using tokens is that it allows us to use the existing payment infrastructure that was developed for plastic credit cards. A token service provider (TSP) server performs the exchange between a token and the actual credit card number, so credit card issuers and merchants can just use their existing systems.


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Rakesh Bhatia

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