The difference between NFC and MST

Saturday, January 03, 2015

The difference between NFC and MST

With so many payment options available, it can be challenging to keep up with the newest technologies. But, as consumers embrace mobile wallets and innovative contactless payments, your business needs to be aware of the latest trends. Two innovative, attention-worthy payment technologies that have emerged in the past decade are NFC and MST.

The two technologies have a lot of similarities, including that consumers can use both to make secure, contactless payments. However, NFC and MST-enabled terminals are not always the same, and being able to accept one doesn’t guarantee the acceptance of the other. As contactless payments become more ubiquitous, it’s critical to be aware of contactless payment options and how your business can accept them.

Offering payment flexibility can help your business appeal to more customers and make the payment process as painless as possible. First, let's take a look at these two contactless payment methods separately. Then we’ll look at the differences and how you can accept them in your business.

What is NFC?

Near field communication (NFC) is a wireless technology that allows consumers to make contactless payments. NFC protocols allow communication between two electronic devices at a distance of 4cm or less. This technology can be used with smartphones, tablets, computers and other devices. NFC permits users to exchange digital content quickly, make secure purchases and connect multiple devices.

If your business currently accepts Apple Pay, Android Pay and Google Pay, you’re already equipped to accept NFC payments. To make a purchase with these types of mobile payments, your customer unlocks their smartphone and brings it close to your payment terminal. Then, an electromagnetic induction link occurs between the POS terminal and smartphone to complete the transaction.

Although not initially a popular choice, NFC gained traction when Apple promoted this technology in 2014. Apple reached advanced agreements with a range of merchants before launching its Apple Pay technology, ensuring that this payment method would be somewhat widely accepted from the start. Released in September 2014, the iPhone 6 and iPhone 6 Plus were the first phones enabled with Apple Pay.

What is MST?

Magnetic secure transmission (MST) is a contactless payment technology that uses magnetic signals to communicate payment information between the customer’s device and the payment terminal. This technology functions similarly to the magnetic stripe on Visa or Mastercard debit cards and credit cards. The primary difference is that while debit cards need to be swiped or inserted into a card reader, MST is contactless.

MST technology is owned by Samsung and was acquired by this company in 2015 from LoopPay. The first Samsung phones enabled with this technology were the Galaxy Note 5 and the Samsung Galaxy S6 series, both of which were released in 2015. This technology usually works within 3 inches and can attach tokens like chip payment cards.

Most NFC-enabled terminals are capable of accepting MST payments. But this proprietary technology is designed to work with terminals that are not configured to accept NFC, as well. With MST, the Samsung device is supposed to be able to emulate a magnetic card stripe or chip to be processed by the card reader.

Differences between NFC and MST

The key difference between MST and NFC payment technology is the ability of the merchant’s payment terminal to accept either. Because MST mimics the traditional magstripe of a credit or debit card, MST technology can be used with older terminals that might not be set up to accept NFC payments.

If your payment terminals already support NFC payments, you can most likely accept both MST and NFC. However, because MST is a proprietary payment technology owned by Samsung, other smartphone users are limited to mobile payment options with POS terminals that are enabled for NFC.

How can you accept MST payments?

If your POS system is already enabled to accept magstripe payments from credit cards, good news! You are already set up to accept MST payments. One of the most appealing elements of Samsung Pay with MST is that this technology is almost ubiquitously accepted and doesn’t require an NFC terminal to make purchases.

The future of Samsung Pay

Though MST is an innovative method for bridging the gap between NFC and traditional payment terminals, Samsung began to discontinue the use of MST in their phones in 2021. This change came with an announcement that their newest phones would not be enabled with MST technology in the United States. Samsung cites the increasing popularity of NFC technology and the prevalence of NFC-enabled terminals as their reasoning for discontinuing this technology.

The Samsung Galaxy S21 and S21 Ultra were the first phones that didn’t have MST in the US, but Samsung has decided to focus its efforts on supporting NFC technology in their Galaxy phones. All previous generations of Samsung phones will continue to be able to use MST for payments where this technology is accepted.

Samsung introduced the ability to pay with wearables in the form of the Gear s3 smartwatch, released in 2016. However, while Samsung Pay works with the new Samsung Galaxy Watch 4, released in August 2021, MST is not enabled for this model.

Conclusion

Awareness of the multitude of options available for contactless and mobile payment methods will help your business be more accessible to a broader range of customers. In addition, offering versatility in the checkout process will make the payment process feel streamlined and help you attract and retain a diverse customer base.

As consumer trends shift toward NFC payments because of their prevalence and increasing accessibility, many merchants are equipping their businesses with NFC terminals. As consumers utilize mobile wallets in favor of payment cards, POS systems need to evolve. So, accepting NFC payments by installing an NFC-enabled terminal could be a forward-thinking move for your business.


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