Samsung Acquires Digital Wallet Startup LoopPay, Looks to Compete with Apple Pay

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Today, Samsung announced plans to acquire mobile payments startup LoopPay, in an effort to build a digital wallet platform that will compete with Apple Pay.

The two companies started talking about a potential partnership in December. LoopPay’s technology stores payment information taken from a credit or debit card’s magnetic strip. The technology works over a magnetic field, which allows it to be compatible with 90 percent of existing card readers.

In comparison, Apple’s mobile payment solution requires merchants to support NFC technology in order for the service to work.

In order to use LoopPay, customers currently need an app and a standalone hardware device, which comes in the form of a smartphone case. However, it is unlikely that Samsung will take this approach. The Korean smartphone giant may build the technology directly into its future smartphones.

“LoopPay founders and veteran payment industry entrepreneurs Will Graylin and George Wallner will work closely with Samsung’s Mobile Division. LoopPay has built an advanced and widely accepted contactless payment solution using its patented Magnetic Secure Transmission (MST) technology. LoopPay’s talent and technology, paired with Samsung’s world leading mobile technology, global presence, and distribution capabilities will help drive the next wave of innovation in the digital smart wallet.”

With LoopPay, upcoming Samsung devices may be able to replace the need for carrying a credit card. Instead, customers will be able to wave their phones at the payment terminal in the same way Apple Pay works for iPhone customers.

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According to Samsung, LoopPay will provide customers with a “seamless, safe, and reliable” mobile wallet platform. President and Head of IT and Mobile Division at Samsung Electronics JK Shin said:

“This acquisition accelerates our vision to drive and lead innovation in the world of mobile commerce. Our goal has always been to build the smartest, most secure, user-friendly mobile wallet experience, and we are delighted to welcome LoopPay to take us closer to this goal”

The current version of LoopPay does not incorporate the same security features as Apple Pay, but the technology does allow for loyalty and membership cards which is something we expect Apple to add in the future. We expect that Samsung will provide new security features, with possible fingerprint sensor integration, when the company adds the technology to their future devices.

[via BusinessWire]

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  • Spencer Mcintosh

    You know, its possible for Samsung to come up with their own ideas.

  • That is true. In this case, it’s easier to acquire a turn-key company that started on Kickstarter. Assuming this will try to emulate a fingerprint reader as a passcode, maybe we will see something in the S6 coming in March.

  • aaloo

    samsung keeps betting on older tech. first finger swipe technology from the 90s, now this magnetic strip payment.

  • Dave

    Because they’re obsessed with doing everything Apple does, but they don’t have the technology that Apple has (ie. Authentec’s Touch ID or Apple Pay’s tokenization), so they just push out these half-assed attempts to kinda/sorta/maybe reproduce what Apple has.

  • CanucksGoals

    It’s kind of too late in the game for Samsung. I guess it doesn’t hurt having another feature for it’s customers.

  • ShaBi

    Why is it late when not much has really been established by anyone yet?

  • We’ll revisit once Apple Pay expands outside the USA.

  • MattEgansHairLine

    …they just never bother.

  • Be-Bound

    Maybe a bit late, but bearing in mind Apple from far the best organized company and is therefore running fast on that segment, maybe Samsung can prove, once again, that a late start does not mean they cannot be successful…

  • Chrome262

    Pretty nightmarish when you think of all the security issues that Android has, hopefully Samsung can come come up with something more secure.

  • Chrome262

    Waiting to see if BB comes out with mobile payments, maybe some time two years from now they will announce it Hahaha. Funny thing though is security wise its probably better suited then and Android platform

  • sukisszoze

    Seems like Apple’s business model is more profitable where it gets a % of each transaction. Guess Samsung just hope to sell more phones with this new feature.