Samsung Gobbles Apple Pay Rival LoopPay (And It Doesn't Use NFC Technology)
Samsung will reportedly be stepping into the mobile payment industry, having recently announced the acquisition of LoopPay Inc.
It was rumored that the two companies were discussing the acquisition back in December, but nothing had been confirmed until Samsung made the announcement on Wednesday, Feb. 18.
"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," said David Eun, executive vice president of Samsung's Global Innovation Center. "Through this deal, we can significantly accelerate our mobile commerce efforts. LoopPay's outstanding leaders and team have deep-rooted relationships with banks, card networks and merchants that will complement those Samsung has established over the years."
LoopPay first launched out of a Kickstarter campaign as a mobile payments platform that was designed to be easier to use than the likes of Apple Pay and Google Wallet. LoopPay is supported on iOS and Android smartphones.
LoopPay is touted as essentially turning "in-store payment terminals where you normally swipe a credit card into contactless readers." It works with both an app and a small fob. Users simply open the LoopPay app, after which they select which card to use. The merchant then taps the fob on the card swipe machine. The company also offers an all-in-one phone case, with the built-in fob. Data is encrypted and a PIN number protects the LoopPay app.
The acquisition of LoopPay highlights Samsung's growing attempts at creating an ecosystem that is independent of Google's own ecosystem for Android. Google, for example, has its Google Play Music service, while Samsung has launched Milk Music to rival it. Google, of course, has Google Wallet, with Samsung now likely looking to rebrand and launch LoopPay as its own competitor to Wallet.
In fact, some reports suggest that LoopPay will be launching alongside the Samsung Galaxy S6 at Mobile World Congress in Barcelona in March.
The mobile payment market has been growing ever since Apple announced its new payment platform called Apple Pay. Apple Pay largely brought mobile payments into the public eye, causing other companies to jump onto the bandwagon. This includes CurrentC, which is being created by a group of merchants, including the likes of Wal-Mart, in an attempt to bypass credit card fees. The system works by taking money directly out of the user's bank account.
LoopPay could eventually take off because of the fact that it bypasses the need for merchants to upgrade their pay points to support Near-Field Technology, which is something that is largely needed for a wide-spread adoption of mobile payments.