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.
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.