Samsung is to acquire mobile wallet provider LoopPay whose technology turns existing magnetic strip readers into secure and contactless receivers, for an undisclosed sum.
As part of the acquisition, LoopPay founders Will Graylin and George Wallner will work closely with Samsung’s Mobile Division. The two companies already had an existing relationship, with Samsung first identifying the potential for LoopPay’s technology when itbecame a strategic investor.
The investment, facilitated by Samsung’s Global Innovation Center, helped fund LoopPay’s patented Magnetic Secure Transmission (MST) technology.
LoopPay has claimed it works at around 90 per cent of retail locations while Apple Pay works at less than 5 per cent. LoopPay has also stated it supports more than 10,000 issuers, thousands of credit and debit cards, and most gift, loyalty, private label, prepaid, and campus cards, while Apple Pay supports only 90 issuers. LoopPay also works with a variety of smartphones.
JK Shin, president and head of IT and mobile division at Samsung Electronics, said: “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.”
US mobile proximity payments, which can be defined as payments made with a smartphone at the point of sale in place of a credit card or cash, totaled $3.5bn in 2014, according to eMarketer.
"Samsung's acquisition of LoopPay signals how serious it is about building and launching a competitive mobile payments system in the United States," said Bryan Yeager, analyst at eMarketer. "It also likely gives Samsung exclusive access to LoopPay's technology, which enables mobile payments to be made at merchants who haven't upgraded their point of sale technology to support newer contactless payment methods like NFC -- of which there are many."
According to eMarketer, there were 15.9 million US mobile proximity payment users in 2014. By 2016, that figure will more than double to reach 36.2 billion and total 57 million by 2018.