NFC Times Exclusive Insight – Samsung Electronics has signed an agreement to acquire mobile-payments start-up LoopPay, setting up a battle between Apple and Samsung in the U.S. over rival mobile-payments platforms, while raising the prospect for more fragmentation in the U.S.
Samsung is expected to play up the chief advantage of LoopPay’s proprietary technology over NFC in the U.S., its acceptance at what the start-up has said is 90% of the installed base of point-of-sale terminals compared with a small but growing number of contactless terminals where consumers can tap with Apple Pay and other NFC-enabled wallets. Samsung is also expected to use tokenization from Visa and perhaps tokens from other payment schemes.
As NFC Times reported in November, LoopPay uses a technology it calls magnetic secure transmission, or MST, which taps in on the magnetic transmissions that just about all POS terminals support to read data when mag-stripe cards are swiped. But LoopPay needed support from one or more OEMs to build technology into their devices so that the start-up could avoid the need for consumers to buy dongles or other attachments for their smartphones to enable the LoopPay technology.