Samsung is planning to launch its own mobile payment service next year, in competition to both Google Wallet and Apple Pay, reports Re/code. It suggests that the company is in talks with LoopPay, a startup which describes itself as “the most accepted mobile wallet on the planet.”
The technology would allow people with certain Samsung phones to pay in the vast majority of brick and mortar stores by waving their phones instead of swiping with a credit card or cash […]
The talks between Samsung and LoopPay come as the idea of paying for goods in stores using a phone was rekindled in the U.S. thanks to the launch of Apple Pay.
The plan would allow Samsung’s mobile payment service to work with all cards and all payment terminals right out of the box …
Instead of using an NFC chip for contactless payment, LoopPay transmits a magnetic signal which simulates the swiping of the magnetic strip on a card. That means it works with any payment terminal, contactless or not. It currently lacks the security features of Apple Pay, but the company hopes to add a similar tokenization feature later – where a single-use code is transmitted in place of the card details.
LoopPay works with existing phones by selling a card case or fob which transmits the required signal to the cardreader. If Samsung licensed the technology, it would be able to embed the transmitter into its high-end handsets.
While magstrips are a soon-to-be-obsolete technology, with US banks planning to introduce chip-and-signature or chip-and-PIN cards by next October, the new cards will still have a magnetic strip as a fallback. This means magstrip card terminals will be around for some time, and it’s believed Samsung will be using NFC in tandem, allowing its system to be used with both old and new payment terminals.
The benefit to Samsung is it gets something that works with any card and any terminal, without needing either banks or retailers to sign-up. Apple today announced that its mobile payment service now supports 90% of US cards by transaction volume, but Samsung would hit the ground with 100% compatibility on day one.
While neither Samsung nor LoopPay have confirmed the report, Re/code notes that LoopPay CEO Will Graylin told them earlier this month that the company’s technology would be embedded into a mainstream smartphone in 2015 that would have “massive penetration.”