Will Non-Mag Stripe Tech Change the Mobile Payments Industry?
In yet another advance beyond traditional magnetic-stripe card readers, Loop developed the “Loop Fob” and “Loop ChargeCase” that allows mobile devices and terminals to communicate without a conventional wireless or Near Field Communication (NFC) signal. Here’s how it works: the Loop Fob and Loop ChargeCase send a magnetic transmission to a payment terminal's mag-stripe reader via Magnetic Secure Transmission (MST). Loop then turns the mag stripe reader into a receiver, without requiring changes to the terminal's hardware or software. This is just what the mobile payment industry needs, as various tech providers waste time debating which system is better: NFC, Bluetooth wireless, and other technologies. Ironically, this bright idea comes from a Boston, Mass.-based startup that is still trying to raise funds via Kickstarter. Loop’s Chief Technology Officer George Wallner may not compare Loop’s idea to all the other transmission systems, but he does recognize the technology’s benefits over traditional mag swipe processing. “We provide a cleaner, better transmission than comes out of the mag swipe,” he told PaymentsSource. Still, Loop’s technology has its shortfalls. While the company says its devices work with 90 percent of terminals, so far they are not compatible with ATMs or gas station payment systems. After testing 100 Loop Fob prototypes and 100 ChargeCases, the company says full-scale production could begin early next year.