A report suggests that Samsung is planning to come out with its own contactless mobile payments system next year. Samsung is reportedly in talks with LoopPay, a payment startup based in Burlington, MA.
A source has informed re/code that a prototype of the wireless payments system running successfully on a Samsung phone has been developed. Will Graylin, CEO of LoopPay has revealed that in 2015, his company’s payments system technology will be embedded inside a smartphone made by a major manufacturer having “massive penetration”. He however declined to disclose the name of the manufacturer or to even to confirm if it was Samsung when asked about it.
By introducing the LoopPay payments system technology in their smartphones, Samsung is posing direct competition to Apple Pay since Apple is offering such kind of mobile payment system on its iPhone 6 and iPhone 6 Plus smartphones and on the Apple Watch too. A user selects the credit card through which he wants to make payment for his purchases and the payment information is transmitted through NFC (Near Field Communication) just by holding the phone near the terminal. User’s identity is verified through Touch ID fingerprint sensor.
Currently, LoopPay does not use the NFC system but uses a “magnetic secure transmission” technology which transmits information stored on the magnetic stripe of the credit or debit card wirelessly to the store’s checkout terminal. This technology is embedded in a fob or a digital payment card. Users have to tap this device near the spot on the terminal where the credit card is swiped.
LoopPay is available at many more locations compared to Apple Pay. According to LoopPay, Apple Pay is available in 220,000 retail locations in the US while its own system is available in over 10 million retail locations. Now since more and more retail stores are updating their checkout terminal that also includes NFC, LoopPay is planning to use this technology in its payments system.
Will Graylin revealed that after the partnership with the smartphone major, NFC technology would also be used to transmit payment information to the seller, apart from LoopPay’s existing “magnetic secure transmission” technology. This way, the users will not be required to open an app to make the payment.