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).
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.