Mobile recap: LoopPay vs. Apple Pay; new Pebble; LG Watch Urbane

Samsung has a new way to fight back against Apple and it has nothing to do with Google. This week, Samsung bought LoopPay; a company that adds mobile payments to phones using a magnetic field. Early reports and rumors about Samsung’s Galaxy S6 handset — expected to debut on March 1 — suggested a LoopPay tie-in.

Loop mobile payments

Google may not like it, but the acquisition gives Samsung a digital payment solution of its own, although the company can certainly still offer [company]Google[/company] Wallet on its Android devices. Google’s Wallet, four years in the making, hasn’t really resounded with consumers though. I’ve been using the service on and off since 2011 with Android phones that have an NFC chip inside them but retailers have been slow to adopt or support Wallet. That’s in stark contrast to [company]Apple[/company] Pay, which is a successful twist on the same NFC technology.

While LoopPay will work for now in the U.S. by spoofing the magnetic card stripe on current payment cards, Samsung will have to adopt it for the upcoming change in payments here. Samsung will need to create bank partnerships for EMV payments; essentially, we’re getting a payment card upgrade here later this year, which will require LoopPay to work with chip-and-PIN cards. LoopPay knew of this transition, so it’s not completely in the dark; we’ll see how it handles the change in a few months.

pebble action

Before then, we may have a new smartwatch or wearable device from Pebble. The company, which ran a hugely successful Kickstarter campaign in 2012 for its current smartwatch, is expected to announce something on Tuesday of this week. That’s based on a countdown timer that’s been busily ticking away since Thursday.

While we have no idea what Pebble is counting down for, the company did say earlier this month that it would be launching new hardware this year, along with a unique software interface. Perhaps we’ll get a glimpse of a new watch this week; hopefully, it’s not just a new band for the existing Pebble.

lg watch urbane gold

 

Even if Pebble does launch a new smartwatch, it’s going to compete with more Android Wear devices. The latest, LG’s Watch Urbane, hides its smarts in what looks like a very traditional analog timepiece. The stainless steel Urbane will be available in gold or silver finishes, uses the same 1.3-inch circular plastic OLED touchscreen display as the existing G Watch R and is aimed for the upscale smartwatch market.

Why Samsung is right to bypass Google Wallet for LoopPay

Don’t look now, but there may be discontent between Google and one of its key Android partners: again. On Friday, the Wall Street Journal reported growing tensions between Samsung and Google.

It’s not the first time we’ve heard that the relationship is strained. So what’s the latest issue? Samsung’s purchase of LoopPay, which gives it a mobile payment platform of its own.

LoopPay Card Case Transaction

Although neither company would likely admit publicly to any friction, there’s plenty of reason to think it’s there.

Google was reportedly not happy when Samsung decided to use its own Tizen software to power smartwatches, for example. Samsung later added Android Wear options to the marketplace but pushed forward with its own Tizen phone in December to further break away from Google’s handset control. Surely Samsung wasn’t pleased when Google bought one of its partners in Motorola, even though the company put out canned statement supporting [company]Google[/company].

And now we have the LoopPay deal, giving Samsung its own mobile payment platform even though Google has Wallet available for Android partners.

Google Wallet

I can see why Google might be upset, particularly since Samsung has no obligation to offer LoopPay to its peers in the Android device market, Google gets no payment data from LoopPay transactions, and because LoopPay already works with an estimated 90 percent of all card payment terminals. The product uses magnetic fields to send card data from a phone to replicate the information stored on the magnetic stripe of a credit or debit card.

Here’s the thing: I don’t blame Samsung in this case one bit.

Google itself could have bought LoopPay and made the technology available to all of its Android partners at any time in the past. Instead, it’s been working on Google Wallet for several years but from the outside looking in, and it has been an inconsistent effort that has faced several roadblocks: Lack of worldwide support, new terminals needed and carrier pushback along with competing carrier payment solutions, for example.

Image: Softcard

Put another way: Why shouldn’t Samsung be looking out for itself if Google’s own Wallet product isn’t widely adopted, isn’t well-known by the Android phone users and isn’t marketed well? If Google really wants to rally the troops with a common mobile payment system, it needs to evolve Wallet, something the Journal said it will do this year, possibly even paying carriers for Wallet to be prominently displayed on Android phones.

Regardless of Google’s plans to put Wallet back in the spotlight, there’s no guarantee that Samsung will be in a better position later this year. Spoofing the magnetic stripe of a credit or debit card will work for now, but how will Samsung handle the coming transition to smartchip or EMV payment cards in the U.S. later this year? It’s too early to say, but LoopPay has told my colleague Kevin Fitchard that it has already started talks with banks to firm up support and partnerships for EMV payments, for which it has a solution in mind.

As critical I can be towards Samsung for creating a dizzying array of confusing product lines combined with cramming too many features in devices, I have to give the company credit here. Samsung is watching [company]Apple[/company] erode its smartphone sales crown on the one hand, as it quickly gains Apple Pay adoption on the other.

Apple Pay at the register

Samsung can’t combat that with Google Wallet in its current state, so what’s the alternative to going it alone? Sure it could wait for Wallet to gain more traction but Google has had since the 2011 debut of Wallet for that happen. You can’t blame Samsung for trying to take the lead when Google has faltered in mobile payments.