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Samsung Pay vs Apple Pay: Mobile payment war heats up

It's been a year since Apple Pay launched, and now there's a potentially easier mobile payment option, Samsung Pay.

But for as much as we use our smartphones, few people are using them to pay. According to analysts from Aite Group, mobile payments account for only 1 percent of all retail transactions in the US.

While they promise a more convenient way to pay, there are still some major inconveniences. Mobile payment systems only work with certain credit cards, require the latest smartphones and retailers need to have the right payment terminals.

Apple and Android Pay require terminals with a technology called near field communication, or NFC. Only 27 percent of stores have updated their terminals to accept NFC payments, which makes the chances of even having the option to use your phone where you want fairly slim.

Apple rival Samsung differentiates itself from its competition by making its mobile payment service available in more places. It, too, uses NFC, but it can also be used at any machine that accepts credit card swipes.

That, Samsung sings, makes it possible to use Samsung Pay almost anywhere.

However, even though Samsung Pay works at almost all retailers from high-end boutiques to food stores, right now you need the newest Samsung phones to get it, and only three major banks are compatible.

As with any financial transaction, there are security concerns, but by and large, mobile payment systems offer more protection than regular credit cards.

"It's new and if you look at the technology underneath mobile payments, it actually has the potential to be more secure than a traditional credit card transaction," Robert Clyde, international vice president at ISACA, a research nonprofit focusing on information security, told's Lexy Savvides.

That's because your actual credit card number is never transmitted. Instead a one-time number is used in a process called tokenization.

"All of that information that is so important to safeguard suddenly becomes a lesser issue when a mobile payment is involved," Clyde added.

He recommends using a credit card instead of a debit card as your underlying payment method, using additional protections like pins and fingerprints, and having unique passwords for financial accounts.

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