Samsung Buys LoopPay to Challenge Apple

When Apple confirmed rumors it would get into payments last Summer at the company’s iPhone 6 event, there should have been little doubt in anyone’s mind that the other major smartphone manufacturer, Samsung, would sit idly by & not get into the payment space itself.

Today, the South Korean company announced it will buy LoopPay — a competitor to Apple’s product which works on magnetic secure transmission (MST) technology. Unlike the NFC that powers Apple Pay, MST functions on the same POS hardware that a majority of retailers already own; therefore, providing a “leg-up” in terms of acceptability (which LoopPay’s website touts being 90% of total retail outlets).

Image via LoopPay

One of the biggest drawbacks to LoopPay has been that, while retailers don’t need to purchase new hardware, smartphone owners do. LoopPay’s technology works through a separate smartphone case or key fob. However, as Business Insider reported in January, Samsung has already committed to integrating LoopPay’s hardware into a major smartphone release slated this year — likely, the Galaxy S6.

The move comes at a perfect time for Samsung.

As of Q4 2014, Samsung held a narrow .16% advantage over Apple for smartphone market share — a margin dramatically reduced by Apple’s record sales of the iPhone 6 and 6-Plus.  While payments alone certainly won’t sell smartphones; fence-sitters eager for a mobile payment solution could be attracted to the ready availability of LoopPay’s technology in stores.

Currently, LoopPay does offer a case for iPhone owners as well. No word on whether this Samsung acquisition will have an impact on that model.

Image via LoopPay

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