The company on Wednesday shared details about its service, which is offered through a partnership with online personal finance company SoFi. Its debit card, which will be available via Mastercard in the US, will have no fees, including those related to overdrafts and transfers and through the use of certain ATMs in the US.
Samsung Money users will be able to check their balance, review past statements and search transactions through the Samsung Pay app. They'll also be able to flag suspicious activity, pause or restart spending, freeze or unfreeze their card, change their PIN and assign their trusted contact, all through the app.
While the service is predominantly virtual, there also will be a physical card with no numbers, just like the Apple Card.
"We knew that, as a tech company, we had an interesting opportunity to really provide tremendous innovation and disruption in this space, primarily by bringing more value, convenience and security to consumers," Sang Ahn, general manager of Samsung Pay, said in an interview with CNET ahead of the announcement.
Samsung is just the latest tech company to expand into personal finance. Instead of offering a credit card like Apple, Samsung opted for a debit card. Two out of every three card transactions made in the US are via pre-paid and non-prepaid debit cards, Ahn said, citing a Federal Reserve study. But that same study found that the value of credit card payments exceeded the value of debit card payments by almost 30%.
Samsung Money has some limitations. For one, there's currently no way to add physical cash to the account. And there's no cash-back option like with Apple's credit card. Users will collect Samsung rewards, which can be used in Samsung's store and with other partners. As a one-time offer, Galaxy users with at least 1,000 Samsung Reward Points will be able to redeem points for $5, which will be deposited in their Samsung Money accounts.
The debit card marks the latest evolution of Samsung Pay. It will join Apple's credit card -- called Apple Card -- and a rumored debit card from Google. The companies have all been looking for ways to expand beyond letting people pay for items with their mobile devices. Offering a credit or debit card is a way to build customer loyalty amid fierce competition for smartphone customers. It also comes when people are closely watching their budgets in light of the global novel coronavirus pandemic.
"We're in a time where consumers and people are looking a lot closer at how they spend their money," Ahn said. They're trying to physically touch things less often, as well as be aware of where their money is going, he said. "We want to help them do more with the money that they are spending and saving," he said.
Samsung payments history
Samsung launched Samsung Pay, its mobile payments service for its smartphones and wearables, in 2015. The idea was for users to pay for items by waving their Galaxy device near a store's checkout register instead of swiping a credit card. It was much like Apple Pay, which went live a year earlier, but it didn't require special point-of-sale terminals that had tap-to-pay NFC technology. Instead, Samsung Pay worked with NFC, magnetic stripe and EMV (Europay, MasterCard and Visa) terminals for chip-based cards.
Since that time, Samsung Pay has given users the ability to add loyalty cards, receive cash back for making certain purchases and take advantage of promotions. That includes bonus Samsung account points and vouchers with a number of participating retailers. Chase Pay users can also link their existing digital wallet with Samsung Pay and people can use Samsung Pay to pay for mass transit.
Apple introduced its Apple Card last year and started letting people sign up for its physical credit card in August. It's designed for iPhone users, has no fees, offers daily cash-back rewards and works with Apple Pay. It also exists as a physical titanium credit card. It's part of Apple's effort to expand beyond being the "iPhone company" and into making recurring money from services.
And Google is believed to be developing physical and digital debit cards, which would be tied to an app for payments, managing purchases and checking balances. The goal is to make the card the foundation of the search giant's Google Pay mobile payments service.
Samsung earlier this month said it planned toas its Samsung Pay service turns five.
Show me the Money
When it comes to Samsung Money, users can open an individual or joint cash management account. The debit card has a 0.2% annual percentage yield, and deposits are insured by the FDIC for up to $1.5 million.
If taking out cash at an ATM, you'll be reimbursed for the fees if you're accessing one of the 55,000 machines in the Allpoint Network. In San Francisco, that includes getting cash at the checkout in Walgreens and CVS pharmacies (which is also free for other debit card holders), as well as Allpoint ATMs in places like taquerias and grocery stores. But if you use your card at out-of-network ATMs, including overseas -- when we're allowed to travel again, that is -- you'll be responsible for covering the fees charged by those ATMs.
Samsung and SoFi have "a pretty robust pipeline of product innovations" planned for Samsung Money, SoFi CEO Anthony Noto said in an interview ahead of the news. The upcoming functionalities, which he didn't detail, will give "you greater control of how much you spend and how much you save, but also to look back at recent transactions and better plan in the future."
Currently, there's no way to add physical cash to Samsung Money accounts, but Noto said that's something his company is working on. The idea is a user would be able to deposit money through a partner ATM, he said.
Before Wednesday's announcement, Samsung already offered one form of debit card, called Samsung Pay Cash. It doesn't have a physical card but allows users to create a digital, prepaid card that they can store within Samsung Pay and use to make purchase online and in stores where Samsung Pay and Debit Mastercard are accepted.
Samsung Pay cash won't be going away when Samsung Money is live, Ahn said.
"There are two very different use cases," he said. "Samsung Money by SoFi is really for ... anyone who wants a high end, ... innovative, no fee, high yield cash management service," Ahn said. Samsung Pay Cash, on the other hand was aimed at people who wanted a way to move money from one account to another and use it more like a prepaid card, he said.
Starting Wednesday, the Samsung Pay app will include information about Samsung Money, with its own dedicated tab. Galaxy device owners can register for alerts about the new service before being able to sign up for accounts later this summer.
When the service is available, would-be Samsung Money users can get approved instantly through the Samsung Pay app (assuming they meet identification and other qualifications). They'll then receive their physical debit cards in the mail in about 10 business days and can activate the cards through the Samsung Pay app.
"Once the account is created, the virtual debit card will be provisioned immediately into the Samsung Pay wallet so you can use it right away," Ahn said. "Mobile-first financial services will play an even more important role going forward in a post-coronavirus world."