Is Samsung preparing to launch an Apple Pay competitor? Rumor has it that it is, and that it may be teaming up with Boston-based startup LoopPay to do it.
Like Apple Pay, consumers would be able to use their Samsung phones to complete transactions at merchant POS terminals. Both companies have declined to comment.
Re/code, which broke the news on December 16th, reported that this potential partnership is being fueled by Apple’s launch of Apple Pay.
Samsung’s Latest Galaxy phone includes fingerpoint identification technology, which could potentially be incorporated into the new payments system, Re/code also reported.
Currently, Samsung’s technology can be used in conjunction with PayPal’s app to pay for items at any store that accepts PayPal.
LoopPay’s technology wirelessly transmits data stored on a debit or credit card’s magnetic stripe to a merchant’s terminal system, without having to swipe the physical card.
The startup calls their technology magnetic secure transmission, which can be enabled across a variety of devices, including a LoopPay digital payment card that can be used on its own or while secured in a LoopPay smartphone case. To complete an in-store purchase, the LoopPay user simply taps their device near the terminal reader where a card would normally be swiped. That makes the technology compatible with most all existing merchant terminals.
LoopPay CEO Will Graylin told Re/code in early December that the technology would be implemented into an smartphone sometime next year that would have “massive penetration.” He declined to name the handset manufacturer.
Graylin also said the unidentified phone would also incorporate NFC technology, in addition to LoopPay’s magnetic stripe-mimicking technology. He said that users would not have to open up a mobile app to complete payment.
LoopPay is also incorporating tokenization into its mobile payments solution which could have the advantage today of securing all of the transactions done using the its technology at all existing merchant terminals. On that point, it is reported that LoopPay is in conversations with financial service companies. One of LoopPay’s investors is payments network giant, Visa.