Samsung enters into mobile payments with LoopPay buy
Samsung will acquire mobile wallet LoopPay, the companies announced Wednesday.
The South Korean conglomerate has had an interest in LoopPay, a Boston-based startup, since its 2013 Kickstarter campaign.
LoopPay doesn’t use Near Field Technology as Apple Pay and Google Wallet do. Instead, it emits a signal, called magnetic secure transmission (MST), that mimics the magnetic strip on credit cards. LoopPay says that the technology is compatible with 90% of retail stores.
Samsung has had a keen interest in LoopPay because the system works with existing retail point-of-sales systems’ magnetic strip readers — offering a massive and easy bridge to mobile payments without much change required of either retailers or consumers.
Competitor Apple Pay has received a lot of attention because the mobile payment system has finally captured the attention of many consumers. But those consumers remain in the minority, in large part because moving to a drastically new system requires behavior changes that take a while to be acceptable to most. LoopPay goes a long way to solving this because the adjustments are minimal. Plus, Samsung says that consumers will appreciate LoopPay’s added benefits, like additional security and add-ons like loyalty perks.
“We talk about all these acronyms, like MST and EMV and all that stuff, but the reality is that there’s something like 20 billion credit cards out there, and credit cards work really well,” Samsung Innovation Center EVP David Eun told Techcrunch about LoopPay’s potential. “That’s where the inertia and the momentum is, so if you’re one of the partners we’re speaking to in this ecosystem, whether merchants or banks or credit card issuers, I think everyone understands that there’s going to be credit cards out there for a while.”
Follow Daphne Howland on Twitter