In a bid to compete with Apple Pay and bring its own mobile payments system to the market, Samsung is in the midst of talks with a payments startup, hoping to unveil something sometime in 2015.
According to a story in Recode, Samsung has been talking to LoopPay, a startup based in Burlington, Mass. The idea would be to tap into LoopPay’s technology, allowing users of some Samsung phones to be able to make payments at physical stores just by waving their devices at a point-of-sales (POS) terminal.
Here’s what you need to know:
- One unidentified source has told Recode that LoopPay has started working on a prototype of a payments system for Samsung phones. However, it sounds like nothing is set in stone and the deal isn’t 100 per cent confirmed, another source has said.
- According to a source, Samsung will probably take a page out of Apple’s book and get its users to confirm payments through a fingerprint identification sensor, which is included on the Samsung Galaxy S5. (Apple gets its users to complete payments through Apple Pay with its Touch ID feature).
- LoopPay’s technology works by allowing users to wirelessly transmit data from the magnetic stripe on a debit or credit card, without needing to use the actual card. That technology isn’t currently housed in a phone, but LoopPay does sell fobs and a digital payment card. To use either of these products, users just need to tap them at a POS terminal.
- Neither Samsung nor LoopPay were willing to comment at this point, though LoopPay’s CEO, Will Graylin, did tell Recode in an earlier interview that his company would be partnering with a mainstream smartphone maker and getting its technology in one of its smartphones by 2015. However, he refused to say which smartphone maker it would be.
- LoopPay is also hoping to boost the security on its payments system by looking into tokenization, which substitutes debit or credit card numbers with a unique string of other random numbers. LoopPay has been speaking with Visa and other financial services companies to try to figure this out, and Apple Pay is already using this method to transfer data from an iPhone to a store’s POS terminal.