As contactless payments become more and more common, it’s smart to know what options are available to your customers and what you need to support them. As a general rule of thumb, supporting more payment options is better. Payment flexibility reduces transaction barriers, which is arguably the most important part of payment design.
The last thing you want is someone to have the ability to pay but not be able to, and payment convenience also helps acquire repeating customers. Imagine a regular who always gets the same thing and can walk in and just swipe their card as they walk by or someone who misplaced their wallet but still needs to pay. Contactless is a benefit in both of these scenarios.
Reducing payment friction also means more collections and less downtime. The point is, making payments as painless as possible is always a good idea.
There are two main types of contactless payments you need to be aware of — MST and NFC. We’re going to talk a bit about what MST is and how it differs from NFC before going into how your business should approach MST payments.
MST, or magnetic secure transmission, is a mobile payment technology that allows smartphones to transact wireless payments with traditional magstripe systems and modern terminals.
In other words, it’s contactless payments that work with older, pre-chip terminals using magnetic signals.
The technology usually works within 3 inches and even has the ability to attach tokens, much like EMV (chip payments). This means customers and merchants can transact more securely and conveniently without upgrading their equipment.
Pretty cool, right?
The thing about MST, though, is that it is exclusively owned by Samsung and is now branded as Samsung Pay.
A company called LoopPay was bought by Samsung a few years ago, and Samsung equips their phones with their tech now.
Here’s what Samsung says about MST:
Magnetic Secure Transmission, or MST, is an advanced technology that helps power Samsung Pay. It generates a magnetic signal similar to that of a traditional payment card when swiped, providing the added convenience of being able to pay quickly on the go without having to reach for your wallet. It then transmits that magnetic signal from your device to the payment terminal’s card reader for further processing.
Accepted at nearly all payment terminals with a card reader, MST technology is very convenient and is even more secure than traditional methods of payment card. Samsung Pay also supports NFC payments.
Okay, so we know that MST is a contactless payment technology that Samsung uses to give its customers the ability to have a “digital wallet” and pay without a physical card.
How is that different from NFC options like Android Pay or Apple Pay?
The difference comes down to the hardware required for MST and NFC. They function very similarly but are built on different technology.
NFC was first pioneered by Google Pay, but it didn’t really catch on until Apple Pay organized a launch with hundreds of thousands of merchants in tow.
NFC stands for near-field communication and works by communicating with short-range, electromagnetic induction. Just like MST or chip, it can also use tokenization during the transacting process. This means that each transaction is coupled with a unique code that can only be used once, so even if the data is swiped it’s not useable by scammers.
So both allow people to upload their physical cards into their phones and complete transactions wirelessly, but the fundamental difference is that MST (Samsung Pay) allows customers to transact with any old magstripe machine.
Whereas NFC payments require merchants to have special hardware, MST’s key advantage is that it works with both outdated and modern terminals. This eliminates the need for merchants to put in extra work and gives customers exponentially more merchants who “accept” Samsung Pay.
Ah… you may say. So that’s why Samsung chose to buy LoopPay instead of developing their own tech — well you are exactly right. LoopPay had a really smart solution to the contactless payments adoption inertia.
So as we just mentioned, merchants don’t really have to do anything else to support MST, which is why it’s so valuable.
MST won’t work with card-in machines like ATMs, but any typical terminal with a magstripe is fair game. The best thing you can do is just let your workforce know about this payment option and to embrace it without making the customers feel awkward.
Part of that may be incorporating more customer-facing terminals. Instead of having terminals tucked behind a counter, start moving your business toward giving the customer that ability to pay how they want — they aren’t going to hand their phone across the counter or through a window to someone, so make it easy for them.
If I support NFC do I already support MST?
Yes! Almost certainly you do. Just double check that you have a terminal with a magstripe available and/or ask an employee with a Samsung phone to give it a shot. If you’re working with a bigger business with more locations, as long as your default terminal setup includes a magstripe somewhere you’re all set.
Why isn’t MST bigger?
Well, it may be used more than you think and is often lumped into NFC. Plus, the US is notoriously slow for adopting new payment technology. We just switched to chip after literal decades. MST is starting to get bigger with partnerships with card issuers like Chase, and I bet we’ll see a bit more from MST as we move forward.
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