The functioning of the Samsung Pay contactless payment service in Russia, which has a 17 percent market share, might be prohibited due to a patent dispute.
The owners of the intellectual rights to the digital payment system has accused the South Korean IT giant of illegally using technology, and the court has agreed with its requests. The judgment will take effect in a month unless it is contested in court, which experts doubt will happen.
According to attorneys, Samsung might ultimately challenge this patent or reach an agreement with the rights holder.
Samsung Pay was announced in August 2015 and began operations in Russia a year later. According to the National Financial Research Agency (NAFI), as of March 2021, 32% of Russian mobile payment service users choose Google Pay, 30% prefer Apple Pay, and 17% prefer Samsung Pay. The patent in question offers an invention for making online payments utilizing the buyer’s mobile device and the seller’s payment terminal.
Maxim Labzin, Senior Partner at Intellect legal company, describes the court’s ruling as “motivated.”
“If it is sustained, the service’s deployment would be impossible in Russia, regardless of whether it operates on devices sold before or after the court’s judgment,” he added.
According to the lawyer, Samsung now has three options: appeal the judgment to a higher court, contest the patent’s inventiveness, or reach an agreement with the claimant, such as by paying a license.
Contactless payments are popular among Russians and have been increasing in recent years, so these limits are unlikely to endure, according to Yegor Krivoshea of the Skolkovo-New Economic School’s Center for Research in Financial Technologies.
“Most likely, a compromise will be reached, and Samsung users will be able to utilize contactless smartphone payments.”