Eye on Mobile Payments: More About Samsung Pay Cash; Zelle Eyes Community Banks

More details emerged Tuesday about Samsung Pay Cash, the virtual prepaid card Samsung Electronics America Inc. first announced late last week as the latest feature for its mobile wallet. 

Global Payments Inc., the big Atlanta-based processor that recently acquired Total System Services Inc. (TSYS), said Monday it has now integrated technology enabling Samsung Pay Cash’s virtual prepaid Mastercard into Samsung’s wallet. The technology comes from Netspend, a company Global picked up as part of its $21.5-billion deal this year for TSYS. Global also announced Mastercard Inc. is providing tokenization service for Samsung Pay Cash, a move intended to mask the digital card’s actual credentials as users perform transactions.

Samsung Pay Cash is aimed at “a variety of use cases,” Global’s announcement says, most especially those that traditional prepaid cards help control, such as spending and budgeting. Devices that can run Samsung Pay, which the Korean electronics company launched in 2015, include models S6 and later.

Users can load the virtual card via a credit or debit card already in the Samsung Pay app or an automated clearing house transfer from an existing bank account. Users can then rely on the new card to make payments at any location that accepts Samsung Pay and Mastercard. The Samsung Pay app uses technology that allows the wallet to interact with both traditional magnetic-stripe-based terminals and those that use near-field communication technology.

The new service comes as mobile-payments services—particularly the so-called Pays from Apple Inc. and Alphabet Inc.’s Google unit, as well as Samsung—struggle to spur more adoption and usage among consumers. “It’s fundamental that we create enhanced financial-service experiences that expand beyond today’s industry capabilities to bring people more convenience, security, and control when it comes to spending their money in their own way,” said Kelley Knutson, Netspend’s president, in a statement.

Samsung Pay Cash also follows a cross-border money-transfer service Samsung Pay launched last week in collaboration with Finablr PLC and its Travelex service.

Also on Tuesday, Northwest Financial Corp. announced that it has tripled the number of new active peer-to-peer payments users since launching the Zelle service in December. The banking company also said P2P transaction volume has soared 152% in that time, with users sending more than $2 million on the service. Zelle, which is owned by some of the nation’s biggest banks and operated by Phoenix, Ariz.-based Early Warning Services LLC, works both online and as a mobile app.

Northwest, which runs a network of community banks in Iowa and Nebraska, has adopted a digital approach to reach consumers in both towns and rural areas. And Zelle is proving a popular feature, according to Fiserv Inc., a Brookfield, Wis.-based financial-services technology company that enables the service for clients. “Consumer demand is continuing to drive the adoption of Zelle at financial institutions of all sizes,” said Tom Allanson, division president for electronic payments at Fiserv, in a statement.

Early Warning reported in July it processed $44 billion in Zelle volume in the second quarter on 171 million transactions. Those numbers were up 56% and 71%, respectively, compared to the same period in 2018.