Back in February, Samsung acquired LoopPay, a start-up based in Massachusetts, to bolster its presence in the mobile payment game and help it better compete with the likes of Google’s Wallet, PayPal and the relatively new Apple Pay system. At the time, it wasn’t known how much the transaction had cost Samsung, but now various sources suggest that the price tag was approximately $250 million. This number could rise further based on any performance related earnouts, although such terms are unknown.
A Samsung spokeswoman and LoopPay CEO Will Graylin both declined to comment on the figure.
LoopPay’s technology is important for Samsung as it allows its new phones, like the Galaxy S6, to mimic a regular card swipe, meaning that Samsung Pay should work everywhere that currently accepts card payments. This gives it an advantage over Apple Pay or Google Wallet, which requires the retailer to accommodate NFC transactions. Samsung has also said that its payment platform will be compatible with NFC, which is gradually gaining presence in retails stores.
In related news, Samsung has announced that it will be closing down its Samsung Wallet service on June 30th. Tickets and reservations will still be available after this date, but no new transactions will be accepted after the end of June.
The company didn’t give a reason for the closure, but it’s probably safe to say that the launch build-up to Samsung Pay might have something to do with it. All we know so far is that Samsung is planning to launch its new payment system sometime in H2 2015. September is seen as a likely candidate, given that the IFA trade show and the launch of the Galaxy Note 5 will take place that month.
LoopPay also previously announced they would make mobile payment-enabled cases for Samsung’s Galaxy Note 4 and Galaxy S5 handsets that would release sometime in 2015, which should help Samsung expand its mobile payment ecosystem.
Whether or not LoopPay will help Samsung become the dominant force in mobile payments remains to be seen. But mobile companies seem convinced that their products and systems will replace our debit and credit cards in the not too distant future.