I haven't been able to find a detailed explanation of how it works. Somehow it emits a magnetic pulse that simulates the card being swiped, without having to physically swipe the card. Best guess is that it uses some kind of magnetic induction to induce a current in the reader the same way that a swipe would.

I never had a Samsung phone so I can't comment on how it worked in practice or the reliability. Can't find any mention of having to hold your phone a particular way so presumably it's direction-independent, although apparently sometimes it might not be possible to hold your phone close enough for the reader to pick it up.

https://en.wikipedia.org/wiki/Magnetic_secure_transmission