Samsung just announced its intention to buy Boston-based LoopPay, a mobile payments company that has one very noteworthy benefit—the technology can work with standard magnetic stripe-reading credit card terminals.
The payments company claims it works with 90% of those existing machines, which would immediately give Samsung a payments system with far more support than Apple Pay right out of the gate.
“We are excited to take our relationship with LoopPay to the next level, by bringing consumers a mobile wallet solution that is not just safe and reliable, but also widely accepted at more locations than any competing service,” said David Eun, EVP of Samsung’s Global Innovation Center, in a press statement.
Apple has partnerships with as many as 220,000 stores, including its own and locations of Bloomingdales, Macy’s, Duane Reade, McDonald’s, Sephora, Petco, Panera Bread, Staples, Nike, Walgreens, Subway, Whole Foods, and more. That sounds like a lot, but it’s just a fraction of the tens of millions of retailers that accept traditional plastic credit cards.
Apple Pay is still a nascent system lacking in support and coverage—largely because it requires payment terminals equipped with Near Field Communication to work. NFC, a short-range wireless communication standard, has been gaining attention, but its adoption still falters at the check-out point, as it would force retailers to update their systems and hardware.
Details of the Samsung acquisition, including timeframe and cost, were not disclosed.
Rumors that the two companies would be working together have buzzed since last year. In January, LoopPay CEO Will Graylin told Business Insider that his company’s technology is slated to go in a major new smartphone this year. It seems all but certain this will be Samsung’s upcoming new flagship, the Galaxy S6.
Previously, LoopPay made phone cases and dongles that managed payments my creating a magnetic field that interacted with standard credit card readers. Users had to input their raw account numbers so that the hardware could essentially translate that into the magnetic field. No word yet on whether LoopPay-equipped Samsung devices will work exactly the same way.
The press release follows:
Samsung to Acquire LoopPay, Transformative Digital Wallet Platform
Mountain View, CA and Seoul, Korea – February 18, 2015 – Samsung Electronics Co., Ltd. today announced that it has agreed to acquire LoopPay, the acclaimed mobile wallet solutions provider that turns existing magnetic stripe readers into secure, contactless receivers. LoopPay’s technology has the potential to work in approximately 90% of existing point-of-sale (POS) terminals, according to internal research, with no investment in new infrastructure required by merchants. LoopPay will join Samsung to strengthen the company’s overall efforts to provide users with seamless, safe, and reliable mobile wallet solutions.
As part of the acquisition, LoopPay founders and veteran payment industry entrepreneurs Will Graylin and George Wallner will work closely with Samsung’s Mobile Division. LoopPay has built an advanced and widely accepted contactless payment solution using its patented Magnetic Secure Transmission (MST) technology. LoopPay’s talent and technology, paired with Samsung’s world leading mobile technology, global presence, and distribution capabilities will help drive the next wave of innovation in the digital smart wallet.
“This acquisition accelerates our vision to drive and lead innovation in the world of mobile commerce. Our goal has always been to build the smartest, most secure, user-friendly mobile wallet experience, and we are delighted to welcome LoopPay to take us closer to this goal,” said JK Shin, President and Head of IT and Mobile Division at Samsung Electronics.
Samsung has an existing relationship with LoopPay, having first identified the potential for the pioneering technology when it became a strategic investor along with Visa and Synchrony Financial. The investment, which was facilitated by Samsung’s Global Innovation Center, helped fuel LoopPay’s MST technology development.
“We are excited to take our relationship with LoopPay to the next level, by bringing consumers a mobile wallet solution that is not just safe and reliable, but also widely accepted at more locations than any competing service,” said David Eun, EVP of Samsung’s Global Innovation Center. “Through this deal we can significantly accelerate our mobile commerce efforts. LoopPay’s outstanding leaders and team have deep-rooted relationships with banks, card networks and merchants that will complement those Samsung has established over the years.”
Margaret Keane, President and CEO of Synchrony Financial, the largest provider of private label credit cards in the U.S. and a leader in promotional financing, as well as an investor in LoopPay, commented, “This is great news for our customers who can access their cards and make payments using LoopPay’s contactless MST technology. Our goal is to offer valuable products for our clients, service providers, and our customers. We look forward to working with LoopPay and others to deliver secure mobile payment solutions for all of our 60 million active accounts.”
“LoopPay is focused on delivering a digital wallet solution that is dependable for consumers around the world, one that provides more value from card issuers and the merchants that serve them,” said Will Graylin, CEO of LoopPay. “We are excited to join the Samsung family to continue our goal of making smartphones trusted, secure smart wallets and unlock the limitless possibilities of mobile enabled commerce.”
Photo courtesy of Shutterstock
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