Samsung is said to be discussing a deal with a payments start-up that would help the smartphone maker introduce a mobile payments system in 2015 to rival Apple Pay, multiple sources report.
The technology would allow people with certain Samsung phones to pay in stores by waving their phones instead of swiping with a credit card or cash. It is not yet clear if Samsung had reached a deal with the start-up, LoopPay. One source said the deal could still fall apart. A prototype of the payments system working on a Samsung phone has been created, the other source said. A Samsung spokesman and LoopPay CEO Will Graylin declined to comment.
LoopPay’s technology can wirelessly transmit the same information stored on a debit or credit card’s magnetic stripe to a store’s checkout equipment without swiping a card. The company has embedded the technology, which it calls magnetic secure transmission, into a few hardware products it sells directly to consumers: a fob and a digital payment card that can be used on its own or while secured in a special LoopPay smartphone case.
To complete a purchase, LoopPay users tap any of these devices near the spot on a store’s credit card terminal where a card is usually swiped. Since the technology mimics a card swipe, it works in far more locations than Apple Pay or Google Wallet, which require a store to upgrade to NFC equipment.
LoopPay’s CEO Graylin said earlier this month that his company’s technology would be embedded into a mainstream smartphone in 2015 that would have “massive penetration”. He declined to name the phone maker then, and declined again when asked about the Samsung discussions.
He also said the partnership with the unspecified phone maker would allow payment information to be transmitted to the merchant via NFC technology in addition to via LoopPay’s traditional magnetic stripe-mimicking technology. Users would not have to open up an app to transmit their payment, he added.