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Samsung officially acquires mobile payment startup LoopPay
Samsung has just announced the company’s acquisition of LoopPay, a mobile payment startup company. This acquisition will open up doors for Samsung to compete with mobile payment systems like Apple Pay and Google Wallet. There’s no word yet as to how much LoopPay sold for, but we’ll be sure to update you if that information surfaces.
We can’t say that this acquisition is all that surprising, since LoopPay and Samsung have worked together in the past. Just last month, LoopPay announced they would make mobile payment-enabled cases for Samsung’s Galaxy Note 4 and Galaxy S5 handsets that would release sometime in 2015. Moreover, Samsung was reportedly in talks to acquire LoopPay back in December, though both companies denied the claims. After Apple Pay launched last Fall, it was obvious that Samsung would take action to compete with Apple’s mobile payment platform.
Yesterday, we reported that Samsung was looking to spend their $56 billion cash reserves on M&A and company growth over this next year. After a difficult 2014, it now appears that the company is already getting a start on acquisitions that would “be a good fit” into Samsung’s business model.
If you’re unfamiliar with LoopPay, it brings an interesting take to the mobile payment world. Unlike Apple Pay and Google Wallet who rely heavily on NFC, LoopPay offers something more than that. Of course, it offers transmissions through NFC, but the payment system’s “magnetic secure transmission” technology is backwards-compatible with legacy terminals, and the built-in hardware makes payments by means of a small electromagnetic field that closely resembles that of a credit card swipe. So to complete a payment with LoopPay, all you need to do is tap your mobile device near the credit card swiping terminal… and that’s all. This allows the payment method to be compatible with both NFC payment modules as well as credit card swiping terminals. If you need some more clarification as to how exactly LoopPay functions, check out the video below:
Sometime after this acquisition is complete, card information will likely be secured on Samsung devices by using the fingerprint sensor, much like we see with Apple Pay. For now, LoopPay is only compatible with LoopPay-enabled phone cases and keychains, but we’ll likely see a huge overhaul of the technology once the payment company fully integrates with Samsung.
LoopPay’s founders, Will Graylin and George Wallner, will work closely with Samsung’s mobile division going forward. Take a look at the press release below for more information on the acquisition.
[press]Samsung to Acquire LoopPay, Transformative Digital Wallet Platform
Mountain View, CA and Seoul, Korea – February 18, 2015 – Samsung Electronics Co., Ltd. today announced that it has agreed to acquire LoopPay, the acclaimed mobile wallet solutions provider that turns existing magnetic stripe readers into secure, contactless receivers. LoopPay’s technology has the potential to work in approximately 90% of existing point-of-sale (POS) terminals, according to internal research, with no investment in new infrastructure required by merchants. LoopPay will join Samsung to strengthen the company’s overall efforts to provide users with seamless, safe, and reliable mobile wallet solutions. As part of the acquisition, LoopPay founders and veteran payment industry entrepreneurs Will Graylin and George Wallner will work closely with Samsung’s Mobile Division. LoopPay has built an advanced and widely accepted contactless payment solution using its patented Magnetic Secure Transmission (MST) technology. LoopPay’s talent and technology, paired with Samsung’s world leading mobile technology, global presence, and distribution capabilities will help drive the next wave of innovation in the digital smart wallet. “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,” said JK Shin, President and Head of IT and Mobile Division at Samsung Electronics. Samsung has an existing relationship with LoopPay, having first identified the potential for the pioneering technology when it became a strategic investor along with Visa and Synchrony Financial. The investment, which was facilitated by Samsung’s Global Innovation Center, helped fuel LoopPay’s MST technology development. “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,” said David Eun, EVP of Samsung’s Global Innovation Center. “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.” Margaret Keane, President and CEO of Synchrony Financial, the largest provider of private label credit cards in the U.S. and a leader in promotional financing, as well as an investor in LoopPay, commented, “This is great news for our customers who can access their cards and make payments using LoopPay’s contactless MST technology. Our goal is to offer valuable products for our clients, service providers, and our customers. We look forward to working with LoopPay and others to deliver secure mobile payment solutions for all of our 60 million active accounts.” “LoopPay is focused on delivering a digital wallet solution that is dependable for consumers around the world, one that provides more value from card issuers and the merchants that serve them,” said Will Graylin, CEO of LoopPay. “We are excited to join the Samsung family to continue our goal of making smartphones trusted, secure smart wallets and unlock the limitless possibilities of mobile enabled[/press]