Samsung buys LoopPay in warning shot to Apple

Samsung logoIn an effort to take on Apple Pay head on, Samsung announced Wednesday that it has acquired LoopPay, a Boston-based startup, for an undisclosed sum.

Various startups have been jockeying for position in the mobile payments arena, especially now that magnetic stripe cards have become easy targets for massive fraud in the United States and major credit card issuers have agreed to begin issuing European-style chip-and-PIN-based cards by October 2015.

“This acquisition accelerates our vision to drive and lead innovation in the world of mobile commerce,” JK Shin, president and head of IT and mobile division at Samsung Electronics, said in a statement. “Our goal has always been to build the smartest, most secure, user-friendly mobile wallet experience, and we are delighted to welcome LoopPay to take us closer to this goal.”

Late last year, LoopPay CEO Will Graylin told Re/code that he anticipated the imminent “massive penetration” of the company’s technology.

Samsung купила LoopPay

Re/code wrote at the time:

[Graylin] also said the partnership with the unspecified phone maker would allow payment information to be transmitted to the merchant via NFC technology in addition to via LoopPay’s traditional magnetic stripe-mimicking technology. Users would not have to open up an app to transmit their payment, he added.

LoopPay primarily works by using what it calls its “Magnetic Secure Technology,” or MST—a clever way to mimic the swipe of a magnetic stripe found on all American credit and debit cards. That MST is embedded into add-on mobile cases or key fobs. By contrast, Apple Pay uses Near Field Communication, or NFC.

As LoopPay describes its own technology:

MST technology generates changing magnetic fields over a very short period of time. This is accomplished by putting alternating current through an inductive loop, which can then be received by the magnetic read head of the credit card reader. The signal received from the device emulates the same magnetic field change as a mag stripe card when swiped across the same read head. LoopPay works within a 3-inch distance from the read head. The field dissipates rapidly beyond that point, and only exists during a transmission initiated by the user.

Source: Ars Technica

Tags: Samsung

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