Samsung in negotiations to launch its own mobile payment system

Not to be outdone by its rival, Samsung may be preparing a mobile payment option of its own to challenge Apple Pay.

According to Re/code, Samsung is in the process of negotiating a deal with mobile payment startup LoopPay, which would allow the smartphone manufacturer to use its technology in a payments system on its upcoming phone.

Much like Apple Pay, the new system would reportedly store credit and debit card information so that shoppers need only swipe their phone when making a payment, and would make use of fingerprint scanning technology to complete transactions.

The technology can also be used with PayPal's app but does not require shoppers to open an app to complete payments in-store.

Where LoopPay's technology could give Samsung a step up is its flexibility. While the new system is expected to work with NFC technology, like Apple Pay and Google Wallet, LoopPay is able to wirelessly transmit card information to checkout equipment in-store in a way that simulates a card swipe. That means stores do not have to upgrade their checkout systems in order to accept payments, and makes it possible for shoppers to pay with their phone at many more locations than Apple Pay.

While the potential deal could still break down, LoopPay CEO Will Graylin made comments in December suggesting that the company's technology would be used in a mainstream phone with "massive penetration" in 2015.

Of course, there would be little upside for new mobile payments systems without the successful launch of Apple Pay last year. The system got off to a hot start with 1 million users signing up in the first few days, and while adoption over the holiday shopping season wasn't impressive, the mere existence of Apple Pay has increased the usage of competing payment systems.

For more:
-See this Re/code story
-See this Small Business Trends story

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