Samsung Introduces NFC & Magnetic Secure Transmission Methods After Acquiring LoopPay
Samsung has announced the acquisition of the mobile payment company LoopPay. The strategic acquisition of a mobile payment system will help Samsung to compete against it’s growing rivals in the heated mobile payment space such as Google Wallet and the newly launched Apple Pay. Financial details around the LoopPay acquisition by Samsung have not been officially stated.
How does Samsung’s NFC Mobile Payment System ‘Samsung Pay’ work? Just like Apple Pay, mobile customers will have to tap their phone on a retail store’s payment machine since both Apple and Samsung use NFC technology. The payment machine also needs NFC, something many merchants will not have until later this year. Samsung will be supplementing their NFC technology with another technology from LoopPay’s acquisition. LoopPay’s technology replicates the magnetic-strip signals on plastic cards, so it works with more merchants. While NFC transactions can be authorized through the phones’ fingerprint sensors, LoopPay transactions might still require a physical signature.
Many analysts are not surprised at this acquisition as LoopPay and Samsung have worked closely together in the past. Last month, LoopPay announced that it will launch cases with enabled mobile payment system for the Galaxy Note 4 and the Galaxy S5 which will be released later this year. The disucssions to acquire LoopPay began in December, but both companies had declined a statement then. The timing was important as Apple Pay was introduced last fall and Samsung did not have a leading product in the mobile payment category, making Samsung vulnerable.
Samsung is estimated to spend a reserved $56 Billion on mergers and acquisitions, which will be a leading factor in the company’s growth this year.