Samsung tries to buy its way onto Apple Pay’s turf with LoopPay

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loop-pay
Photo: LoopPay

Samsung has bought its own Apple Pay competitor with LoopPay, a U.S. startup that makes cases and accessories for wirelessly transmitting card data with a magnetic signal.

First rumored back in December, Samsung will allegedly integrate LoopPay’s technology into its upcoming phones in an effort to ride the growing mobile payments trend created by Apple Pay.

“We are excited to take our relationship with LoopPay to the next level, by bringing consumers a mobile wallet solution that is not just safe and reliable, but also widely accepted at more locations than any competing service,” said David Eun, EVP of Samsung’s Global Innovation Center.

LoopPay prides itself on working with basically every payments terminal out there. Here’s how it works: you swipe credit cards and reward cards with a Square-like reader plugged into your phone. The app recognizes and stores the cards for you to pay with. Hold your phone with the LoopPay case on to a terminal, press a button, and a magnetic symbol replicating a card swipe is sent.

A key fob can also be preloaded with cards and work the same way. The LoopPay digital payment card (similar to Plastic and other all-in-one solutions) can be placed in the phone case or used on its own.

Samsung’s new Galaxy phone lineup, expected to debut next month, will assumedly integrate the technology so users can store multiple cards without needing an additional case.

Apple Pay, while more secure, does not replicate traditional card swipes — Apple has been clear that it wants to move the industry away from the outdated magnetic stripe system. Instead, individual tokens are created to authenticate each transaction instead of using your actual card number, and Apple Pay requires a terminal to be equipped with NFC.

A Consumer Reports study of mobile payment platforms found LoopPay to be the most accepted and convenient solution, but it scored the lowest in privacy and security when compared to Apple Pay, Google Wallet, and Softcard.

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  • Tim LeVier

    Great acquisition for Samsung. I had looked into LoopPay a bit ago – but I just can’t fathom putting such a large case onto a 6+. Integrating this tech into a phone is the best option.

    With that said – I think the technology behind LoopPay is extremely “dangerous”. I know LoopPay’s software does some checks to ensure you are only loading cards that you own or have billing addresses the same as your own – but it can only be a matter of time before malicious hackers replicate it – reverse engineer it and have their own proprietary app that does not require those checks.

    LoopPay can let you swipe in any magnetic card – including loyalty and gift cards and then spits back out that same magnetic signal. So, why not go down to the local Target, swipe a couple of blank gift cards, wait for them to be loaded and then go on a shopping spree? If I were going to make a security proclamation for those interested – I’d suggest that if you’re going to buy a gift card going forward from now, only buy the preloaded, prepackaged ones that could not have been swiped into a magnetic reader already.

  • digitaldumdum

    “Samsung tries to buy its way onto Apple Pay’s turf with LoopPay”

    And Microsoft tried to compete with Apple on the iPod by bringing the “Zune” to market. A poor, overpriced imitation, it was dead weeks after it made it to the stores. Even now, Microsoft employees are probably forbidden to even whisper the name of that failed gadget.

    LoopPay sounds pretty loopy. Maybe it will catch on, maybe not… though I’d bet money on the latter. Imitation is the sincerest form of flattery, but the imitation itself is seldom remembered.

  • moofer

    You need a special case and a card reader?

    Good luck with that.

  • MARIZ®

    Not encryption, not code, not security
    Yes it’s a Loop

  • lrd555

    Samsung’s getting desperate. I can see profits dropping another 15% to 80% down the next two quarters. Not good news. Apple’s going to surely run them out of business now.

  • Yujin

    So basically all Samsung phones will be able to clone cards….add android and you got a dangerous mix.

  • Dan

    So what stops restaurant staff or anyone with few seconds access to your card from cloning it with his phone?

    This technology is dead on arrival (DoA).