Electronics and technology giant Samsung Electronics Co. Ltd., is stepping into the mobile payment industry, announcing earlier this week it had agreed to acquire Apple Pay rival LoopPay, a mobile wallet solutions provider and payment service.
Prior to Samsung's announced acquisition of LoopPay, the electronics giant was already an investor in the startup, along with Visa and Synchrony Financial.
David Eun, Executive Vice President of Samsung's Global Innovation Center, commented on his company's latest move in a press release:
"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.
Through this deal we can significantly accelerate our mobile commerce efforts. LoopPay’s outstanding leaders and team have deep-rooted relationships with banks, card networks and merchants that will complement those Samsung has established over the years."
Most mobile payment systems, including Apple Pay, Google Wallet, and Softcard (formerly Isis), rely on NFC technology. NFC requires retailers to upgrade their in-store payment terminals to newer ones equipped with NFC wireless chips.
Launched a year ago, LoopPay already has 50 million active accounts. Its technology makes use of the existing magnetic stripe reader already available in most stores, removing the need for retailers to make any further investment in new infrastructure.
This major differentiator allows LoopPay's system to work in approximately 90% of existing point-of-sale (POS) terminals, compared to the 200,000 payment terminals in the US that currently accept NFC.
JK Shin, President and Head of IT and Mobile Division at Samsung Electronics, stated:
"This acquisition accelerates our vision to drive and lead innovation in the world of mobile commerce. 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."
As part of the acquisition, LoopPay founders Will Graylin and George Wallner will work closely with Samsung's Mobile Division.
Currently, LoopPay works through a mobile application and a standalone hardware device. However, LoopPay's technology may be implemented directly into phones in the future, where Samsung devices could have the potential to replace credit cards the same way that Apple Pay is looking to do.
Along with the mobile payment industry, Samsung Electronics had set sight on the blockchain tech, announcing in September 2014, a partnership with IBM to explore possible applications for the blockchain.
The partnership will see the technology giants consult on Adept, a new protocol which will be used to resolve the various problems associated with the concept of the Internet of Things.
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