Samsung has stepped up its efforts to challenge Apple Inc. (NASDAQ:AAPL) in the mobile payments industry by acquiring LoopPay, a company whose technology could put Apple Pay in Samsung’s crosshairs. Last year, reports suggested that both Samsung and LoopPay would be working together on a possible integrated mobile payment solution, but now the company has shown its intent to become a serious contender in the contact-less mobile payment industry.
According to reports, Samsung Electronics (OTCMKTS:SSNLF) will now be looking to integrate LoopPay’s technology into future flagship devices. Currently, LoopPay uses a patented technology, called Magnetic Secure Transmission, which converts point of sale terminals into contact-less card readers. The technology will help Samsung compete against Apple in the mobile payment category. Thanks to the versatility of its technology, LoopPay is accepted in over 10 million stores across the US. Apple is looking to bring more retailers on board, and is upgrading its point of sale hardware to support NFC enabled payments.
While the price tag of the acquisition was not revealed by either company, it was clarified that co-founders Will Graylin and George Wallner will now be working in partnership with Samsung’s Mobile Division. Their years of experience working in the mobile payment industry will certainly benefit the tech giant.
“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, Samsung Electronics president and head of IT and mobile division
Currently, customers are required to use an additional piece of hardware to make their smartphones compatible with LoopPay, making devices bulky and often confusing tellers and employees at sales counters. With LoopPay becoming a part of Samsung, the company is reportedly looking for ways to integrate the technology into its upcoming smartphone models with the aim to provide the same convenience and usability that Apple Pay does for its consumers.
Samsung was clear that its ambitions with LoopPay will not derail its attempt to create its own mobile payment solution. The company aims to create a single comprehensive mobile wallet solution that integrates into the way consumers use their devices without having to change their behavioral patterns.
While Apple Pay is making a significant push to get more retailers on board, LoopPay has the advantage of being compatible with existing point of sale machines. Google Inc’s (NASDAQ:GOOGL) own Google Wallet service is also limited in scope, and doesn’t offer the same level of security that Apple Pay or LoopPay does.
Starting off as a Kickstarter project in late 2013, LoopPay was reportedly contacted by Samsung soon after the campaign ended. This highlights that Samsung’s ambitions in the market are not a result of reactionary tactics deployed in response to the success of Apple Pay.
Samsung is expected to unveil the next Galaxy device on March 1, and we could see an announcement regarding the upcoming mobile payment system. If the company moves quickly, it could capture a significant share of the market as Android users are yet to be presented with a comprehensive mobile payment solution.