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Samsung prepares for Apple Pay battle with LoopPay acquisition

18 February 2015  |  17477 views  |  9 Man holding smartphone

Samsung has agreed a deal to buy mobile wallet outfit LoopPay, giving the electronics giant a new weapon in its brewing battle with Apple for the m-payments market. Financial terms have not been disclosed.

LoopPay's patented technology turns existing magnetic stripe readers into contactless receivers. On its website, the firm boasts that this means that it can work with around 90% of existing POS terminals, compared to just five percent for Apple Pay.

Samsung has been working with LoopPay since joining Visa in a funding round last summer. In December, Re/code reported that the two firms were working on an Apple Pay rival ahead of the launch of the Galaxy S6 handset this spring.

LoopPay founders Will Graylin and George Wallner will work with Samsung’s mobile division as it seeks to tap the startup's Magnetic Secure Transmission technology to "drive the next wave of innovation in the digital smart wallet," says a statement.

David Eun, EVP, global innovation centre, Samsung, says: "We are excited to take our relationship with LoopPay to the next level, by bringing consumers a mobile wallet solution that is not just safe and reliable, but also widely accepted at more locations than any competing service."

Comments: (9)

Jan-Olof Brunila
Jan-Olof Brunila - Swedbank - Stockholm | 19 February, 2015, 08:19

So this means that merchants would net a refitted mag stripe terminal to be able to receive "samsungpay" contactless payments AND a emv chip enabelled NFC capable terminal to accept "applepay" including any emv plastic chipcards with NFC from issuers of Visa or Mastercard cards. Or a new hybrid magstripe + applepay capable emv chip terminal with nfc capability if the desire is  to "accept all" with the preserved ambition of one acceptance technology infrastructure. With something yet unknown in order to accept "xmobilepay" as well for sonys, huaweis... All this effort to accept my payment with my Visa or Mastercard - which today works with physical cards with mag stripe + emv chip? It would most likely speed up the infrastructure deployment if the mobile handset giants and the card schemes would find out one solution. In the meantime mobile handset card payments are not likely to arrive to a shop near you any time soon...

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A Finextra member
A Finextra member | 19 February, 2015, 08:46

It is amazin that when the mobile payments is the subject: compare to Banks; Phone manufacturers - Technology Companies - GSM Operators - Start ups and even Coffee Chains are much more agile, innovative and flexible. I think this means in very near future THE PAYMENT BUSINESS profits of the banks either significantly get lost or if we are lucky, we will share our cake's big part with the new comers, who were not our competitors once! I think we can call this DIGITAL DISRUPTION TO BANKING. Sure there are some possible counter moves the banks can move -  provided that it was well understood and executed.

http://www.slideshare.net/TolgaTavlasPMP/digital-disruption-to-banking-2014-eva

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Paul Love
Paul Love - Compass Plus - Nottingham | 19 February, 2015, 12:16

Is it me, or is this just card skimming in reverse?

If Visa were serious about EMV in the US why are they investing in this technology?

 

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Dave Sanderson
Dave Sanderson - YBS Group - Bradford/Leeds - UK | 23 February, 2015, 15:39

Not just you Paul, this seems like a big step backwards for Samsung to look to implement this technology to take on Apple Pay.

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A Finextra member
A Finextra member | 25 February, 2015, 10:48

Paul

Take a look at http://www.looppay.com/faqs/.  It seems that this is  a wireless interface to the magnetic stripe reader so that the mobile device can appear to be providing a magnetic swipe. This should not be confused with an EMV compliant  contactless payment which includes  security features such as transaction cryprograms and card authentication.

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Paul Love
Paul Love - Compass Plus - Nottingham | 25 February, 2015, 11:08

Hence my comment about card skimmng in reverse - Looppay is definately not EMV compatiable.

I was lucky enough to see a Looppay dongle yesterday, and while this is impressive technologgy, it is aimed at preserving a broken mag-stripe based payments system for a single geographic market.

Looppay will not work with EMV enabled cards and terminals that already widely used by the rest of the world. (http://www.looppay.com/faqs/)

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A Finextra member
A Finextra member | 25 February, 2015, 11:15

OK, so can you clarify your comment about Visa investing in 'this' technology? What are you referring too? 

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Paul Love
Paul Love - Compass Plus - Nottingham | 25 February, 2015, 11:24

In June last year Visa invested directly in Looppay, as reported by Finextra.

http://www.finextra.com/news/announcement.aspx?pressreleaseid=56156

The reason for my confusion is that Looppay is not compatable with EMV, and if Visa are serous about EMV as a global solttion, then this is a transitional soluton at best.

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Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 25 February, 2015, 13:04

Kudos to Samsung and Visa:

  1. I know a cardiothoracic surgeon who picked up a stake in a stent manufacturer. Maybe Visa is following a similar hedging strategy by investing in LoopPay?
  2. LoopPay is an innovative solution for a today's problem - old or new, magstripe dominates USA. Anecdotally, such solutions have gained mainstream adoption faster than wannabe innovative solutions searching for a problem.
  3. And, in any case, what's to stop LoopPay from coming up with an EMV-compliant version of its technology by the time the installed base of EMV terminals achieves critical mass in USA?

All in all, seems like a smart move. 

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