Samsung Entering Mobile Payments With LoopPay

Samsung has been effectively teasing their new flagship smart phone, the new Galaxy S6.  Looks like they're following Apple Pay to enter mobile payments as well.  This might put Samsung, with its Android devices, further at odds with Google.

Here is a look at the approach Samsung has taken towards announcing their new phone:

http://www.theverge.com/2015/2/18/8060127/samsungs-galaxy-s6-teaser-changing-brand

Here is a snippet from that piece:

A dozen days from now, Samsung will unveil its latest flagship Galaxy phone, which will set the company's course for the rest of the year and beyond. Building up to such a momentous event is never easy, but Samsung has landed on a winning strategy by combining teasing blog posts from its engineers on the Samsung Tomorrow website with equally intriguing images and videos on its social channels. What makes this combo work is that we all know the Galaxy S6 is coming, so when Samsung's camera chief pledges amazing innovations and its principal mobile engineer talks about breakthroughs in wireless charging, we can attach these nonspecific promises to a specific device. I like that Samsung is setting high expectations. Good technology deserves bullish promotion just as much as bad gimmicks deserve to be exposed.

Here are two stories regarding Samsung's acquisition of Boston-based LoopPay:

ArsTechnica first: http://arstechnica.com/business/2015/02/samsung-buys-looppay-in-warning-shot-to-apple/

Re/Code second: http://recode.net/2015/02/18/samsung-acquires-payments-startup-to-compete-with-apple-pay/

Here is a snippet from that second piece:

Samsung thinks it has found its Apple Pay competitor, and it’s acquiring the startup to make sure no one gets access to it.

The giant phone maker said on Wednesday it has acquired LoopPay, a U.S.-based company whose technology transmits payments to retail store systems without having to swipe a card. The technology can store and mimic a card swipe, making acceptance easier for merchants since most don’t have to swap out their systems.

Re/code broke the news in December that the companies were in talks to embed LoopPay’s technology into the latest Samsung phones.

Here is a piece on using LoopPay in the real world:

http://www.theverge.com/2014/12/22/7415221/looppay-cardcase-hands-on-review-mobile-payments

Here is a snippet from that piece:

I made a handful of purchases with the LoopPay CardCase here in New York City, and like last time, cashiers were skeptical and confused. I had to explain what this device was and how it worked — ideal if you're a conversationalist, cumbersome if you're in a rush. I experienced a few hiccups as well, but it's safe to say that the errors can be pinned on the fact that the people who rang me up had never seen or even heard of LoopPay.

This is an interesting move that chips away at NFC as the standard solution for mobile payments.  CurrentC has not announced support of NFC either, and we already have Starbucks, et. al. using bar codes.  What about bluetooth?  I'd expect a form of mobile payment to use that technology as well, eventually.  Hmmm.  Interesting times.

LoopPay always felt like it was a play to get the hardware in to an existing smart phone. Just too clunky as a 3rd party ad-on to phones.  Looks like it worked. Good for them. I bet a few champagne bottles were opened at their offices recently.

Happy Reading,

J.W. Gant

PS Here is the front page of LoopPay:

LoopPay, Samsung, and the Digital Wallet Platform

Dear Friends,

Today is a great day for LoopPay and all those who have supported us over the last few years. I’m excited to let you know that LoopPay has signed an agreement to be acquired and become a wholly owned subsidiary of Samsung Electronics America, Inc.

With our earliest supporters at our side, we have been at the forefront of contactless payments to create a platform that brings together issuers, merchants and consumers that facilitate a seamless and rewarding digital wallet experience. We will continue to innovate and operate as an independent team from Boston, Massachusetts.

Thanks to our customers, staff, management team, families, partners and investors who have made LoopPay the world’s most accepted mobile payment solution which leverages existing magnetic stripe readers to receive payments from consumers’ mobile devices.

Our vision of inspiring consumers to transition from a physical wallet to a truly digital wallet will continue. I’m most excited that Samsung shares this vision and has chosen to help change how we shop and pay for goods and services. We look forward to working with Samsung to offer the world’s most secure and compelling mobile platform.

The road ahead is an exciting one, and we look forward to continuing this journey together.

Will