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Samsung Pay Going Free to Take on Apple Pay

In order to gain a foothold in the mobile payment market, Samsung (KRX: 005930) says that it will be waiving fees for its Samsung Pay service for credit card companies in Korea and likely the United States.

Samsung does not charge merchants that have a compatible terminal fees, but rather the credit card companies that it partners with. Reports say that Samsung was planning to charge credit card companies a 0.0015% fee per transaction.

Samsung Pay — which Samsung hopes will be offered as widely as Apple’s (NASDAQ: APPL) rival — is set to launch in the summer. Sources that spoke with Business Korea said that the company is “unlikely” to charge US credit card companies fees considering its decision for the Korean market.

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Samsung’s payment platform is seen as more advanced than Apple’s. Samsung Pay supports NFC, magnetic secure transmission (MST), and barcodes for mobile payments, while Apple’s platform only supports NFC.

However both Samsung and Apple might have an uphill battle in getting consumers to use their mobile payment platforms. While Apple Pay is accepted at nearly 700,000 retail locations in the United States a survey by consultancy group Trustev shows that only 21% of users with compatible Apple devices have tried the service. From that only 2.1% of all respondents have used the service 10 times or more in a week. A whopping 79% of respondents haven’t used it at all.

For Samsung and Apple’s payment processors to take off, they need to show that there’s some benefit to their apps — as credit card companies or PayPal are free to make their own NFC or MST based contact pay apps. Both Samsung and Apple need to figure out how to make their apps more convenient for users if they want them to succeed.