Samsung Buys Digital Wallet Provider LoopPayWill build technology into future smartphones 2/19/2015 08:30:00 AM Eastern
Mountain View, Calif. -- Samsung Electronics has agreed to acquire mobile-wallet technology provider LoopPay.
LoopPay's mobile wallet solution turns existing magnetic stripe readers into secure, contactless receivers using proprietary magnetic secure transmission (MST) technology. LoopPay said its technology has the potential to work in up to 90 percent of existing card-swipe point-of-sale terminals, according to internal research, with no investment in new infrastructure required by retailers.
Rival mobile payment systems such as Apple Pay are based on NFC technology, which requires retailers to upgrade their point-of-sale terminals. MST technology is based on the traditional credit card model that consumers are familiar to remove a barrier to mass consumer acceptance, the companies contend.
While existing LoopPay solutions require accessories, such as a phone case, Samsung said it intends to build LoopPay into future smartphones.
The company will be absorbed by Samsung's Mobile division but will operate independently from its Boston facility. LoopPay CEO Will Graylin will continue as CEO and assume the title of general manager of Samsung Mobile Payments, reporting to executive VP Injong Rhee.
“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 Samsung's Mobile division.
Samsung became a strategic investor in LoopPay soon after the company's successful Kickstarter campaign in late 2013, along with credit card companies Visa and Synchrony Financial. The initial investment, which had not previously been disclosed and was facilitated by Samsung’s Global Innovation Center, helped fuel LoopPay’s MST technology development, Samsung said.
“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, executive VP 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., commented, “This is great news for our customers who can access their cards and make payments using LoopPay's contactless MST technology. 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 LoopPay's Graylin. “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 commerce.”
Terms of the deal were not disclosed.