Rumors of the Samsung Galaxy S6 using LoopPay technology for mobile payments are sounding quite a lot better now that Samsung has bought the company for an undisclosed amount. Samsung announced its purchase of LoopPay on Wednesday, saying it will bring “consumers a mobile wallet solution that is not just safe and reliable, but also widely accepted at more locations than any competing service.”
Clearly, the mention of a competing service is aimed squarely at [company]Apple[/company] Pay, which has quickly grown as an accepted mobile payments service in a short time. But LoopPay is a new twist on old credit and debit card payment tech and is accepted at roughly 90 percent of all locations that accept traditional card payments.
LoopPay does this by creating a magnetic field that replicates the data on the magnetic strip of standard cards. As a result, there’s no need for retail locations to add or use point-of-sale terminals that use NFC wireless technology; much of the existing retail infrastructure already supports LoopPay.
Reports surfaced in December that Samsung was mulling the use of LoopPay for mobile payments, which could have worked out for a simple integration but clearly have turned into an all-out acquisition.
The purchase makes sense because Samsung really has no mobile payment solution of its own and it can’t sit on the sidelines hoping that [company]Google[/company] Wallet becomes the de-facto standard. It’s a smart move, not just for that reason, but also because of the simplicity and broad support LoopPay brings to consumers.
There’s still a question of how Samsung’s LoopPay business will make the transition to chip-and-PIN payments, but at least Samsung has a little time to help LoopPay figure that out. I also wonder if other handset makers — those that compete with Samsung directly — will be able to license or use LoopPay going forward. If not, they’ll have to hope Google Wallet takes off.
(This post was updated several times Wednesday afternoon as more information became available.)