Mobile payments may be growing more secure in Europe thanks to new partnership
Samsung has partnered with Gemalto, an international digital security company, in order to ease the launch of Samsung Pay in Europe. With mobile payments growing in popularity, the demand for secure services is on the rise. Consumers have expressed concern regarding the security of mobile transactions, with many opting not to use their devices to make purchases because their financial information may be at risk of exploitation. Improved security may make mobile payments services more attractive to consumers.
Samsung will leverage tokenization to make transactions more secure
Samsung will be using Gemalto’s Allynis Trusted Service Hub product for its new service. This will allow payments made through Samsung Pay to be more secure as the Allynis Trusted Service Hub makes use of a system that manages payment credentials and it leverages tokenization services. Tokenization replaces a consumer’s financial information with digital tokens, which are used to authenticate payments. Each token is unique for the transaction and does not contain actual financial information. As such, these tokens represent a safe and secure way for consumers to participate in mobile payments.
Mobile payments service has already attracted praise
The new mobile payments service has already launched in South Korea, and Samsung intends to launch the service in the United States in late September. Thus far, consumers have shown interest in the service and have praised its convenience. Samsung Pay makes use of NFC technology and magnetic secure transmissions, allowing it to be used in many major retail stores. The technology powering the service was developed by LoopPay, which was acquired by Samsung earlier this year.
Improved security may ensure that more consumers participate in mobile commerce
Improving security will help mobile payments find more support among consumers. While consumers are interested in using their mobile devices to make purchases, they are wary of doing so because of the security risks associated with such actions. In the past, security breaches have shown just how much of a financial impact malicious attacks can have on consumers and businesses when it comes to the mobile payments space.
Klarna, a mobile payments firm based in Sweden, has made its first U.S. deal by partnering with Overstock.com, an acclaimed online retailer operating in the country. This partnership brings more competition into the mobile commerce space and places Klarna in conflict with PayPal and other companies that have worked to establish a foothold within the growing market. The partnership will also allow Overstock.com to better engage mobile consumers as well, providing the company with a way to support those shopping with their smartphones and tablets.
Firm continues to see success in providing a convenient way to purchase products online
Klarna has helped retailers embrace the mobile payments space for several years. The firm allows retailers to take advantage of convenient payment systems that only require an email and shipping address. Shoppers will then receive an email regarding the transaction they wish to make. In cases where shoppers have a high credit score, they are able to pay for a product when it is shipped rather than during the initial checkout process. In this way, Klarna actually pays the merchant for the product being purchases, with consumers then paying Klarna.
Klarna generates $300 million in revenue last year
Launched in 2005, Klarna now accounts for more than 52 million users. It is currently used to power mobile payments for some 55,000 online retailers operating in Europe. The firm is also backed by a banking license in Europe due to it providing some consumers with credit when shopping online. Last year, Klarna reported $300 million in revenue. Approximately 10% of all e-commerce transactions made in Europe are made through the use of Klarna.
More competition in the mobile payments space will give consumers better options
As mobile payments continue to grow in the U.S., the country is becoming a more attractive market for those that have already established a presence in other countries. Klarna sees some promise in the mobile commerce space and intends to establish a foothold in the U.S. Klarna may succeed in bringing more competition to the mobile payments space, forcing other companies to offer better services.
