LoopPay usually presents itself as "the world's most accepted mobile wallet". Its technology works with 90% of the point-of-sale terminals deployed in the United States, thanks to the fact that it mimics the magnetic stripes of the cards wirelessly.
LoopPay enables retail outlets to turn their pre-existing POSTs into tools for contactless payment, a service it supplements with an app that enables consumers to use their mobile devices to store their card data and thus pay for their purchases.
Acquisition by Samsung
Now, this technology will be owned by Samsung, after the acquisition announcement made last week by the South Korean brand, which aims to reinforce its strategy to compete with Apple Pay and other mobile payment platforms. "We are excited about taking our relationship with LoopPay to the next level, providing consumers with a mobile wallet solution that is not only secure and reliable, but also widely accepted in more retail outlets than any other competing service". Thanks to this agreement we can significantly speed up our efforts in the field of m-commerce", explained David Eun, executive vice president of Samsung's Global Innovation Center. "The LoopPay team has a very close relationship with banks, card networks and retail outlets, which will complement those established by Samsung over the years".
Meanwhile, LoopPay's CEO Will Graylin made it clear that his company would continue to be an independent team within Samsung, headquartered in Boston, and that the company's focus would continue to be to encourage consumers to make the "transition from the physical to the digital wallet". "I'm excited", he added, "with the fact that Samsung shares that vision and has chosen to help change the way in which we pay for goods and services".
Before this acquisition was announced, there had already been rumors that the LoopPay technology could be a core element of Samsung's Galaxy S6 range. We will soon find out, since an announcement will be made on March 1, before the Mobile World Congress in Barcelona.
What's in store for ‘Samsung Pay’ and its competitors?
Industry analysts agree that Samsung's move is not only designed to compete with Apple Pay, but could place them both as the two main contenders in this field, way ahead from the rest. In a statement to Mobile Payments Today, Rick Oglesby, a research analyst for Double Diamond Payments Research, said that "Samsung clearly intends to respond to Apple Pay with its own payment system and, given that so far no rival solution has been able to stand up to Apple Pay's user experience, Samsung will try to do so to the extent possible. Probably by adding exclusive features in order to stand out".
Oglesby also analyzes one of the alleged advantages of the LoopPay technology, the aforementioned compatibility with today's POSTs, on which the new Samsung division has so far based its marketing strategy. This feature is no doubt an advantage over Apple Play in terms of the number of retail outlets that will be able to use its digital wallet... but it also has some disadvantages: "Samsung must also continue to support NFC technology, it wouldn't make sense to be completely incompatible with Apple Pay. But if 'Samsung Pay' supports both LoopPay and NFC, then the user experience will vary from one store to another [...] which could be confusing for consumers and inhibit the adoption of its technology"./p>
According to Oglesby, it is likely that the rest of smartphone manufacturers, as well as Google, will join this trend soon, and that mobile payment technologies will be included as standard in most new smartphones launched on the market. However, he warns, this will in no way guarantee the mass adoption of those payment systems by consumers from now on.