Samsung Electronics' recent acquisition of the LoopPay mobile wallet amps up the volume of POS mobile payment methods by introducing an alternative to Apple Pay and its relatively small early adopter set.
The announcement of Samsung's acquisition came last week, putting LoopPay at the forefront of the company's Mobile Division. LoopPay services are integrated into a hard case cover and dettachable card that comports with mobile devices and works with approximately 90 percent of existing POS terminals, according to a Samsung company statement. As an accessory, LoopPay has limited appeal on its own, but once integrated with Samsung smartphones it could offer an easy mobile payment solution for an established user demographic.
LoopPay "turns existing magnetic stripe readers into secure, contactless receivers," making it compatible with the vast majority of existing POS terminals, according to its creators.
A company representative demonstrated the product for FierceMobileRetail during the International CES in January, but in its existing form, LoopPay has some limitations.
The mobile wallet finds form in a hard case, meaning the aesthetic personalization users would otherwise get from typical phone cases must be sacrificed to use the service. The case also contains a credit card slot for those moments that still require consumers to insert their cards, such as paying at the gas pump or using an ATM.
LoopPay's technology (dubbed magnetic secure transmission, or MST) does not require stores and other merchants to upgrade POS terminals. Users register their cards in the smartphone case and make payments by opening the LoopPay smartphone app, typing in a PIN and waving their LoopPay-enabled case or accessory over a payment terminal's magnetic reader, rather than swiping a credit card.
It's not quite as elegant as Apple Pay's NFC-based proximity payment, but expectations are that LoopPay technology will be built directly into Samsung smartphones going forward.
As part of the acquisition, LoopPay founders and veteran payment industry entrepreneurs Will Graylin and George Wallner will work closely with Samsung's Mobile Division as they continue to lead the company from their Boston offices.
"[Samsung] is interested in our overall platform and technology and the team as a whole," Graylin told USA Today. "Samsung sees it fairly holistically. That was one of the things that intrigued us about this particular acquisition: How do we spread leadership and create and lead innovation in the entire industry?"
More information about what LoopPay might look like post-acquisition is expected to be discussed at Mobile World Congress in Barcelona in March, Graylin said.
The acquisition and ultimate integration of a viable payment technology into Samsung handsets will go a long way toward pushing adoption rates forward. Samsung boasts a 26 percent marketshare of the world's handset market, compared to Apple's 14 percent.
-See this Samsung press release
-See LoopPay's website
-See this Forbes story
-See this USA Today story
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