Apple Pay Vs LoopPay: Samsung Set To Buy Mobile Payment Company LoopPay As They Plan On Challenging Apple Pay Soon!
By Vinay Patel | February 19, 2015 09:47 AM EST
Looks like Samsung is ready to go head-to-head with Apple and its payment system on iPhone, Apple Pay.
Samsung announced on Wednesday, Feb. 18 that they will be acquiring the mobile payment start-up LoopPay, setting up another head-to-head match-up with rival company, Apple.
David Eun, head of Samsung's Global Innovation Centre, stated LoopPay's system is "accepted at more locations than any competing service."
Eun's remarks reflected the fact that unlike Apple Pay, LoopPay's system uses the existing magnetic strip technology already found in most US credit card terminals, implying that no additional investment by merchants is required. LoopPay, which raised early capital through the Kickstarter website in 2013 works by reproducing the signals from a credit card's magnetic swipe as users tap a LoopPay device next to a retailer's card reader.
According to reports from ABCNews, the acquisition strengthens the speculation that the technology could be integrated into one of Samsung's future smartphones, which is expected to be announced March 1 at the Mobile World Congress in Barcelona.
JK Shin, president of Samsung, said in a statement, "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."
FT.com claims in order to use LoopPay, users until now have to buy a special phone case or external "dongle," however its technology incorporation in Samsung phones could greatly increase adoption, setting the stage for a battle of competing payment systems between the world's two largest smartphone producers, Samsung and Apple.
FT.com notes that according to analysts a big increase can be expected in in-store payments using mobile devices in the next few years. For example, Forrester predicts that the US total will grow from $3.7bn last year to $34bn in 2019.
Check out how LoopPay, in its current form, differs from Apple's mobile payments solutions.
In order to use Apple Pay for purchases at brick-and-mortar stores requires an iPhone 6 or iPhone 6 Plus. For LoopPay, on the other hand, the user will need a card retailing for $49.95. Various phone cases can also be purchased to hold the card.
How Does It Work?
Apple Pay - Users simply have to position their iPhone near one of the readers at a store, hold their finger on their Touch ID. The Near Field Communication antenna in the iPhone 6 makes the swift checkout motion easy as it connects with the payment point to complete the transaction. Users will be informed that the checkout was successful with a beep and vibration.
LoopPay - According to ABCNews, LoopPay users can either press a designated button on their device or simply open the LoopPay app. Users can select the card of their choice and tap it on the credit card reader and they are good to go. Apple's rollout requires stores to have NFC readers; however LoopPay can work on most already existing infrastructures, according to its website.
LoopPay said it encrypts all customer data and stores it behind a locked PIN and password. With Apple Pay, a device account number and dynamic security code are used to complete the transaction.
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