
In its recent effort to catch up with Apple’s mobile payment solution, Apple Pay, Samsung is said to have turned to startup company, LoopPay, in an effort to debut its own mobile payments service with large compatibility in 2015. According to Re/code, Samsung’s plans for a contactless payment service would be very familiar to Apple Pay allowing customers to use their Samsung phone to authorize credit card transactions at retail stores. LoopPay is key to the deal as the company has reportedly created a prototype of its system working on a Samsung phone.
As of right now, LoopPay’s technology is currently used in a fob and a digital payment card that doesn’t require near-field communication technology. Instead LoopPay uses what it calls “magnetic secure transmission,” which allows users to tap a device near a credit card magnetic swipe terminal. As of right now, LoopPay is compatible with a variety of smartphones including Apple’s iPhone. Plugging the company’s fob into an iPhone headphone jack and using the LoopWallet app, users can swipe in their credit and debit cards which then scans them into the system. This fob can be used alone where it compiles transactions with a default card and no security or when paired with a smartphone, users can select the card they wish to use and enter a PIN number to authorize the transaction. LoopPay also offers a smartphone case with detachable fob.
Although it isn’t clear how well LoopPay’s technology will fare in the coming years, merchants are expected to phase out traditional magnetic swipes in favor of new secure EMV cards which using an authorization process known as chip and signature. Apple Pay and its NFC-based technology won’t be affected by the EMV switch which is set to take place in October of 2015. LoopPay has reportedly been looking into implementing a tokenization system, similar to Apple Pay, to enhance security in future versions of its technology. For those of you who didn’t know, tokenization authorizes a transaction without allowing the merchant to receive the actual payment information.
We’ll have to see how things turn out but one thing we do know is that Samsung needs to tread carefully as it has earned a “copycat” reputation from several critics over the years when it comes to knocking off features from Apple and this may turn out contributing to the cause.
Source: Re/code
Message