Samsung, the South Korean technology giant, announced Wednesday it had acquired LoopPay, a mobile payments company, signaling its interest in controlling smartphone-based purchases, as reported by ‘The New York Times’.
The move comes just months after the release of Apple Pay, Apple’s mobile payments product, which allows consumers to buy things with little more than a wave of a smartphone.
Though it has been available for only a handful of months, Apple Pay has gained significant traction with retailers and consumers. Whole Foods, the high-end grocery store, said it had processed thousands of Apple Pay transactions. Apple has also persuaded dozens of credit card issuers to sign up to support Apple Pay.
LoopPay, however, believes its reach will extend far beyond that of Apple Pay. LoopPay’s underlying technology relies on a magnetic transmission sent from a user’s phone to a merchant’s payment terminal, mimicking a credit card swipe. The technology, according to LoopPay, can be accepted in more than 90 percent of existing point-of-sale terminals. It is unclear if LoopPay will work on chip-and-pin terminals, which use a more secure form of credit card technology and are being widely phased in this year.
Apple Pay relies on near-field communication technology, which Apple says is available at approximately 220,000 American locations.
“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,” David Eun, executive vice president of Samsung’s Global Innovation Center, said in a statement.
LoopPay will work across many Android smartphones, of which Samsung is one of the world’s largest manufacturers. That is in contrast to Apple Pay, which works only on iPhone 6 and 6 Plus smartphones, and will soon work on the coming Apple Watch.
Both companies are fiercely vying to capture a slice of the United States mobile proximity payments market, which eMarketer estimated at $3.5 billion in 2014. Analysts expect that figure will rise to $36.2 billion by the end of 2016.
Terms of the Samsung-LoopPay deal were not disclosed.
