Samsung is looking to launch mobile payments next year through an alliance with US firm LoopPay — so ratcheting up its rivalry with Apple.
According to Re/code, a deal would enable users of Samsung smartphones to pay for point-of-sale transactions in many retail outlets.
Unlike Apple Pay, which uses NFC, LoopPay has developed its own Magnetic Secure Transmission (MST) technology.
The firm says MST enables retailers to accept mobile payments without needing a hardware upgrade, as is the case with NFC. Indeed, LoopPay’s website argues MST technology is available at over ten million, or 90 per cent, of retail locations in the US, compared to only 220,000 (three per cent) for Apple Pay.
LoopPay has already attracted some heavyweight support in the shape of Visa, which earlier this year invested an undisclosed sum.
At the time, Jim McCarthy, Visa’s SVP of innovation and strategic partnerships, said LoopPay had developed “compelling technology”.
According to the report, Samsung’s interest appears to be in a licensing deal rather than acquiring LoopPay. However, an acquisition is needed if Samsung wants to keep exclusivity over LoopPay’s technology.
There are risks to Samsung’s move, as pointed out by Richard Windsor in his Radio Free Mobile blog, including entering into competition with Google Wallet, and what this might mean for the vendor’s relationship with the search giant.
Previously, Samsung was more interested in NFC. In 2013, it unveiled an alliance with Visa to enable mobile payments via NFC-based smartphones. The partners put Visa payWave applets on Samsung devices, in what they hailed at the time as a “first of its kind” alliance between handset vendor and financial institution.