Tech giant Samsung Electronics has announced the acquisition deal with US mobile payments company LoopPay in an attempt to give tough fight to the Apple Pay mobile payments system.
Despite strong backing, the mobile payments have been witnessing a slowdown as far as catching on in the US and other parts of the world is considered. Companies like Google, Apple and eBay Inc’s PayPal have all launched mobile payments services to allow the users to pay via smartphones.
LoopPay develops small add-on devices for the smartphones that can assist in the transmission of the credit card information in combination with a mobile application.
When the devices are placed within a few centimeters range of a magnetic strip reader, the credit card info can be sent without any wire mode for making payment.
The Magnetic Secure Transmission (MST) technology of LoopPay creates magnetic fields for simulation of those generated via a magnetic strip, and effectively turning card readers into contactless payment devices without any modifications.
The approach varies from that of near field communication (NFC) used in Apple Pay that needs the retailers to have contactless payment terminals that can accept the signals.
The Massachusetts-based mobile payments firm says its solution can work at nearly 90 percent of point-of-sale terminals in the United States, which would provide Samsung an advantage in mobile payments.
“NFC is currently only available in less than 10 percent of US retailers despite NFC’s mobile launch almost a decade ago. MST solves the merchant acceptance issue that has prevented other mobile wallet solutions from reaching mass adoption,” a Samsung spokesperson said in an emailed statement.
In order to upgrade their checkout devices, extra hardware would be needed by LooPay for users. The hardware includes—a card or fob, small rectangular devices in which smartphone can be added either in a phone case or by themselves.
According to Samsung, the executives at LoopPay will be closely working with its mobile division. The technology could be included into Samsung devices.
A Samsung spokesperson said that the company would offer the details on device integration in the near future.