Speculations are rife that Samsung is about to launch its own mobile payments system to rival Apple Pay. The rumored Samsung Pay is said to become available with the sixth-generation Samsung Galaxy S, which is set to be unveiled next month at the Mobile World Congress in Barcelona, Spain.

Reports made late last year that Samsung was in talks with mobile payment provider LoopPay for its own wireless wallet have been confirmed by South Korean publication DDaily, which says that the result of Samsung's negotiations with LoopPay will be unveiled as Samsung Pay in the upcoming Galaxy S6 and the curved display Galaxy S Edge.

Details of how Samsung Pay will work are scant, but a look at LoopPay's technology will give us an idea of how Samsung plans to upend Apple's current mobile wallet. Unlike Apple Pay, which works only on NFC-enabled phones and point-of-sale systems, LoopPay's technology supports both NFC and older magnetic stripes, which could give it an edge because retailers do not need to install new PoS terminals to adopt Samsung Pay and consumers do not have to upgrade their phones to use the payment system.

Instead, they will need to attach a special hardware that uses magnetic coils to replicate a magnetic card swipe. It's unclear what this special hardware is, but LoopPay's own system includes a smartphone case that can be used for mobile payments in more than 10 million locations worldwide.

LoopPay says it will also include tokenization in its systems in 2015. Apple Pay uses this method to generate a random number for each transaction instead of letting merchants see the buyer's credit card number. This ensures that Apple Pay users keep their financial details secure by not giving them away to anyone else. If Samsung wants to give Apple Pay a run for its money in mobile payments, it will most likely use tokens and the fingerprint sensor in the Galaxy S6 to secure users' details. .

However, for Samsung Pay or any other mobile payment system Samsung is cooking up to pose a real threat to Apple Pay, Samsung still has to cozy up to banks and credit card companies to adopt its mobile wallet solution. Only Visa has so far decided to partner with LoopPay, but if the deal turns out well, Visa's investment could be the push Samsung Pay needs to compete with Apple Pay.

Samsung is not new to the world of mobile payments. While Apple is the marketing genius that is pushing Apple Pay into the mainstream, Samsung actually rolled out its own mobile payment service ahead of Apple Pay.

Business Korea reports that Samsung Wallet was launched in South Korea in 2013 and expanded to China in October last year. It is the first NFC-enabled mobile payments system launched in partnership with UnionPay, the biggest credit card provider in China, one of the largest and most lucrative new markets for technology companies.