Samsung has officially announced the acquisition of LoopPay, a mobile payment platform that Samsung is expected to relaunch as its own mobile payment platform.
There are a lot of questions surrounding Samsung's future in the mobile payment industry, especially as the industry continues to heat up. But could Samsung actually make a dent in the mobile payment industry?
One of the most important things to consider is Samsung's timing. Apple is largely credited as bringing mobile payments to the masses through Apple Pay, not because it was the first to launch a mobile payment platform (it wasn't), but more because it put the possibility of paying with a smartphone into the public eye.
Google has a mobile payment platform of its own, called Google Wallet. So does PayPal. The Merchant Customer Exchange, which is a group of merchants including Wal-Mart, is launching its own mobile payment platform called CurrentC soon. With the saturation of the mobile payment market growing, it will certainly be difficult for Samsung to make any real impact.
There is, however, one reason that LoopPay is better than other mobile payment systems. Most mobile payment systems in use today use NFC technology to work. While this is a great technology, many merchants currently do not have NFC-capable pay-points, meaning that mobile payments that use NFC simply won't work. NFC adoption by merchants is largely required for systems like Apple Pay and Google Wallet to take off.
Unless, of course, there's another way to use mobile payments. LoopPay bypasses the need for NFC by using a small fob that can simply be held near any card-swipe machine. Users then open the app on their smartphone, which is connected to the fob, and make the payment. Payments are encrypted and safe.
This does, of course, pose another problem. Users don't necessarily want to have to carry around an extra item, especially when one of the great things about mobile payments is that it eliminates the need to carry around a wallet. Fortunately there are LoopPay products that have a fob built in to a phone case, but it will, in best-case scenario, make the phone bulkier.
Another issue is the fact that users don't necessarily want to hand over their payment information to another giant tech company in an era of hacks and stolen data. It is likely that Google or Apple already has users' payment information for making purchases on either one's app store, so using an Apple or Google-made payment service makes sense as far as data safety goes.
Samsung has a chance to launch a successful payment system with a unique technology, however it will be difficult. With growing competition and growing user awareness and concern over data safety, it will be a long road ahead for Samsung in the mobile payment industry.