Samsung jumps the mobile payment bandwagon by announcing its acquisition of LoopPay, a fierce Apple Pay rival
The mobile payment arena is heating up; as Apple Inc. (NASDAQ:AAPL) faces steady growth in the adoption of Apple Pay by merchants, rivals such as Google Inc (NASDAQ:GOOG) and Samsung (OTCMKTS: SSNLF) are also coming up with their own solutions. We talked about Google Plaso only last week; the latest news is that Samsung has purchased a mobile payment solution for itself, an Apple Pay rival called LoopPay.
LoopPay began its journey in the mobile payment space in 2012 in Boston, by creating a mobile payment solution that was easy to use, fast, and worked everywhere. It developed the patented technology called the Magnetic Secure Transmission (MST) and coupled it with a LoopPay app. Samsung started talks with LoopPay in December 2014 for a mobile payment solution of its own, but instead decided to acquire the company. The amount paid for the purchase is not disclosed yet.
Samsung believes that the LoopPay technology would give the company an edge when it comes to mass acceptance. The reason for this is that LoopPay does not use NFC connectivity for payments like Apple Pay does. Instead, it utilizes magnetic strip readers which are common in stores today. LoopPay has a section on its website detailing how the technology differs from what Apple Pay is proposing and how LoopPay has the upper hand.
The major challenge, in our opinion, will revolve around the adoption of the technology by Android users. Apple Pay is exclusive to Apple devices, which translates into universal adoption with no competition. Samsung and Google, on the other hand, face a fragmented Android market, which would mean they will be battling for the Android market share first and mobile payments market later.
Samsung might just have the high ground here with LoopPay technology. Apple owns 1.7% of mobile payments since the launch of the Apple Pay in September last year, but the number of merchants adopting Apple Pay is trickling upward slowly. Samsung, on the other hand, could expect a 90% acceptance rate by merchants already – at least that’s what LoopPay claims.
LoopPay works through a card case that is attached on the back of the smartphone. The case contains the MST technology which is compatible with major point-of-sale devices. You can store your credit card details in your phone and pay via the LoopPay app.