On the same day that Apple Pay reached a sign-up rate of 90% of US bank cards by transaction volume, Samsung is reportedly planning to launch a rival mobile payment service that would work with 100% of cards and payment terminals on day one.
Re/code suggests that the company is in talks with LoopPay, a startup which describes itself as “the most accepted mobile wallet on the planet.” Instead of using an NFC chip for contactless payment, LoopPay transmits a magnetic signal which simulates the swiping of the magnetic strip on a card. That means it works with all cards and all payment terminals, contactless or not …
LoopPay currently lacks the security features of Apple Pay – where a single-use code is transmitted in place of the card details – but the company hopes to add a similar tokenization feature later. It is said to be in discussions with Visa, a LoopPay investor, regarding this.
LoopPay works with existing phones by selling a card case or fob which transmits the required signal to the cardreader. If Samsung licensed the technology, it would be able to embed the transmitter into its high-end handsets.
While magstrips are a soon-to-be-obsolete technology, with US banks planning to introduce chip-and-signature or chip-and-PIN cards by next October, the new cards will still have a magnetic strip as a fallback. This means magstrip card terminals will be around for some time, and it’s believed Samsung will be using NFC in tandem, allowing its system to be used with both old and new payment terminals.
The benefit to Samsung is it gets something that works with any card and any terminal, without needing either banks or retailers to sign-up.
While neither Samsung nor LoopPay have confirmed the report, Re/code notes that LoopPay CEO Will Graylin told them earlier this month that the company’s technology would be embedded into a mainstream smartphone in 2015 that would have “massive penetration.”