Samsung has purchased LoopPay to enter the mobile payment market and compete with Apple Pay, Google Wallet and Softcard among others. LoopPay is supposed to work with around 90% of retailers already, this is about ten times more than their competitors.
LooPay is able to reach more retailers because they don’t rely on Near Field Communication (NFC) technology, which require the retailer to have a special card reader to work. Instead LoopPay uses something known as Magnetic Secure Transmission (MST) which allows you to use a magnetic card reader.
There are significant downsides to LoopPay though, you need to have a LoopPay product to be able to use the service it’s not a software solution. At the moment there are three different options:
- LoopPay Card $49.95 (iPhone 5 and above, Android 4.3 and above)
- LoopPay Fob $10 (iPhone 4 and above, Android 4.3 and above)
- LoopPay ChargeCase $89.95 (iPhone 5 & 5s only)
Another downside is that at the moment it uses the magnetic strip on card reader to operate. This means it’s not EMV compatible at the moment, although the company does plan to add this compatibility in the near future. They’ll need to hurry because in October of 2015, there will be a liability shift for merchants & card issuers, where whoever has the lesser technology will be responsible for credit card fraud.
My assumption is that Samsung has made this acquisition with the plans to incorporate this into their devices directly. At the moment I can’t really see a reason as to why LoopPay would be able to receive massive adoption without this happening.
Fingers crossed that LoopPay improves their technology to work with EMV, it’s incorporated into Samsung products and credit card issuers start offering bonuses to add our cards to the product (in an attempt to become top of wallet for mobile payments).
This sounds a little loopy, get it loop-pay. Worst name for a product, ever?