Hackers affiliated with the Chinese government have breached the computer network of the mobile wallet outfit at the centre of Samsung Pay, according to the New York Times.
As far back as March, the Codoso Group hackers managed to penetrate the systems of LoopPay, a US startup acquired by South Korean electronics giant Samsung for more than $250 million at the beginning of this year, says the Times, citing sources.
The hack, confirmed by LoopPay and Samsung executives, appears to have targeted LoopPay's magnetic secure transmission (MST) technology, which turns existing mag-stripe readers into contactless receivers.
The MST technology was seen as a major factor in Samsung's acquisition of LoopPay, giving it an advantage over rivals Apple and Google in the mobile wallet battle by making the service available at more locations.
Samsung Pay launched in the US last week, a month after arriving in Korea, where it has notched an impressive $30 million in transactions since debut. More countries are slated to follow in the next few months.
Will Graylin, LoopPay chief executive and co-general manager of Samsung Pay, says that an investigation appears to show that although the hackers accessed corporate networks, they did not get into the production system and that customer data does not seem to have been compromised.