A new, flashy and powerful competitor entering any arena can have any number of effects on the gladiators already slugging it out, a situation that the announcement and launch of Apple Pay has illustrated in real-time in payments over the last ten or so weeks.
Within days of Apple Pay’s announcement, PayPal and eBay announced their plans to split, leaving many in the payments ecosystem asking “now what?”
Google seems to have decided the best way to deal with the emergence of Apple Pay is to focus on other things. Since September 9th the Google blog has offered insight on Rene Zellweger’s face, the importance of voting, the power of the unconscious to undermine one’s progress at in life and the television of the 1990’s. Apple has been mentioned once. Apple Pay has been mentioned, well, never. Google and Apple Pay are spoken about together a lot by analysts, but Google’s team utters no words.
As for CurrentC, well – there’s little left to say that hasn’t already been said. Analogies and comparison are not in short supply and range from the yet-to-be-launched scheme as more comical than the Three Stooges by the USA Today, likened to “kicking a goal for the other team” by David Evans and described as “the scariest thing in payments” by Karen Webster who says now might be the time for a serious reboot.
Will Graylin the CEO of LoopPay, on the other hand, couldn’t be happier. He views Apple Pay as the best thing since sliced bread since it brings mainstream eyes and ears to the mobile payment space, and consumer curiosity is what he told PYMNTS the marketplace needs most right now.
"We love the attention because, frankly, there’s just been a huge lack of awareness that mobile payment is possible. I think if you look at a lot of the press that’s happening, all sorts of folks who are writing in this space and that have been testing Apple Pay, the comments are very similar. It’s “this is great,” but I can hardly find any place to use it and so it’s not going to be replacing my wallet any time soon."
And replacing the wallet, is exactly what Graylin and Loop want to do, they want to do it right now and they even claim they can.
Loop’s previous mobile wallet enhancement was a dongle that, when plugged into a smartphone, essentially imitated the mag stripe on a credit card. It presto-chango turned the phone into something that would work at most credit card terminals that could also process a mag stripe card – which is, well, like most of them.
But there was only one problem. Consumers don’t really like dongles and fobs as payments devices. Payments peripherals are too clunky for all but the most rapid early adopters.
So, yesterday (Nov. 3) the company announced its launch of the next generation of that solution, which ditches the dongle in favor of a card case.
The new product is really two products—The LoopPay Card and the LoopPay Card Case.
"It’s a simple, low-energy Bluetooth-enabled devices that allows consumers to load all their cards in. Whether they’re gift cards, rewards cards, payments cards or private label cards, it works with just about any card consumers currently have as long as they have a mag stripe on the back. Consumers can load them securely into the device we call a ‘card.’ And the card is a miniature blue tooth device tied to your LoopPay application. This attaches to what we call the ‘card case.’ The card case is works on the iPhone models past the iPhone 5. What this solution does is that it essentially allows you to put all your cards into your mobile wallet and can work over ten million merchant locations, today."
That’s possible, Graylin says, because Loop leverages the technology that powers mag stripe readers today.
These cases look much like the cases most people put on iPhones for either decoration or protection. What’s more, Graylin says that they really are quite literally intended to replace the physical wallet, going so far as to even solve for the much dreaded “driver’s license” problem.
"What’s cool about this particular card and card case is that we recognize that people still have to carry around their driver’s license and a back-up payment card. So we included two little slots in a hidden compartment so that consumers can slide their driver’s license and the back-up card right into the case. Boom – you don’t have to carry around a wallet anymore."
Solving for the physical need for a physical wallet is, in some sense, the easy part. The real challenge—and the uphill battle that Loop, Apple and anyone else attempting to bring mobile to the masses has to face is replacing the plastic card/easy as pie to use habit.
"We’re not trying to compete against Apple Pay, PayPal and Google Wallet and the other wallets that are out there. Our true competition is getting consumers the best experience so they can change their habit away from plastic to mobile. Our competition is the plastic cards and the cash they already use."
Loop though is going after the accessibility play and banking on the fact that it will take years and years before NFC is ever fully penetrated, if it ever is. Graylin says that restaurants aren’t the only the only places where the NFC capability may or may not be there- and that is the essential problem that Apple Pay faces that Loop does not.
"I was reading a review of ours on the app store and this guy described how he had been using his LoopPay and his buddy was bragging about how got Apple Pay. The two of them went to Chipotle and his LoopPay paid for it, but his Apple Pay buddy ended up having to pull out his card and pay for it. The reviewer described it has an ‘in your face moments’ that I thought that was kind of funny."
The new case is the newest innovation, but not the last. Tokenization is the next frontier as Loop moves forward in trying to present a more secure solution.
"We’re adding biometric as well. What you will see in the next version is that we have added a fingerprint-sensor for convenience and security. We’ve also been working with major payments players like Visa and big issuers to extend those same tokenization capabilities on to the LoopPay platform.” Graylin says that starting in 2015 they will be able to deliver tokenized one-time use card data directly from the LoopCard or Loop device to transact anywhere using one-time tokenized card numbers.