Samsung Takes On Apple Pay By Acquiring Mobile Wallet Startup LoopPay

An anonymous reader writes Samsung is buying major Apple Pay and Google Wallet competitor LoopPay. "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," JK Shin, Samsung co-CEO and head of the company's mobile business, said in a press release. "What's a real differentiator is this uses technology that's in stores today," David Eun, executive vice president of Samsung's global innovation center, said in an interview. "We don't have to wait for a point in the future where there are a lot more [NFC-enabled] terminals."

Comments

Strongly Worded...

[Anonymous Coward]

Seems that "Takes On" is probably far too strong a term for what Samsung is doing. "Desperately tries to remain relevant by hitching itself to an already obsolete payment method" is probably closer to the truth.

Re:Strongly Worded...

[Rosyna]

Correct, LoopPay only works with existing magnetic swipe readers. LoopPay works by basically cloning the credit card. The LoopPay devices sends out a magnetic field that is picked up by the magstripe reader in the POS terminal.

LoopPay does not use NFC or RFID. Which also means it's great for those that want to commit credit card fraud since there is no verification or executable code to copy. Just load up the LoopPay device with multiple CC numbers, and see which ones work.

LoopPay also does not work unless there is a magstripe reader in the POS device. In October 2015, retailers in the US will start being liable for fraud committed via the magstripe reader, meaning retailers likely won't be willing to accept magstripe cards, such as those the LoopPay copies.

Re:Strongly Worded...

[iluvcapra]

LoopPay works by basically cloning the credit card.

Is that even permitted under PCI DSS? I know other projects, like Coin, get hung up on this, for good reason.

Re:Strongly Worded...

[bluemonq]

If you want "too strong a term", how about the submitter calling LoopPay a "major" competitor. That one is truly hilarious.

Aren't retailers going to be upgrading anyway

[SuperKendall]

The article points out how LoopPay can more easily work with existing terminals, and ApplePay needs retailers to get new terminals.

But aren't most retailers going to be upgrading in the near term anyway? The U.S. is moving to credit cards with chips now which mean most serious retailers will be upgrading. The little retailers are probably mostly going to upgrade also, once Square supports ApplePay because you don't want to pass up those customers.

It's a nice try but I don't think it will get much traction no matter how easy it is for retailers to support, since they have to convince the customer first...

Re:Aren't retailers going to be upgrading anyway

[tlhIngan]

The shift is supposed to be pretty much in effect beginning of 2016 but there really is little movement in either the part of the banks or the merchants. The banks don't want to spend money to quickly replace the cards with something nobody yet takes and merchants don't want to spend money to take cards that haven't been issued yet.

Actually, the shift is in October, when a bill comes into force that liability shifts to the least secure thing in the chain. If the bank supports it, and the customer has a chip card, but the merchant got a swipe reader, then the merchant is responsible for the fraud.

If the bank gives the cardholder a non-chip card, well, liability goes to the bank. (If you have non-chip cards, most banks will probably issue you new cards out of cycle, so if you still use your swipe card instead of your new chip card, you're going to be liable).

Ironically, Apple Pay might have kickstarted the process because upgrading to support NFC means you get a chip reader too. (Apple Pay is just an implementation of EMV, so Apple Pay support comes "for free" with a new reader)

Merchants will want to delay delay and delay, but they run the real risk of the readers being out of stock and being stuck with the liability while they wait for new readers because they didn't upgrade when there was plenty of time.

Loo Pay?

[brantondaveperson]

Great name, Samsung. Nice work.

...letmegetthisstraight

[pushing-robot]

So it amplifies and broadcasts the signal held on the magnetic stripe of an old-style credit card. The completely unencrypted, insecure data that has your card number AND the 3-4 digit verification number.

Why? Because modern card readers will never catch on, of course! Especially when retailers will be tripping over themselves to switch to the new smart readers in a year, since the credit card processors will hold them responsible for any fraud resulting from still using the old gear.

This is a train wreck. Good on LoopPay for convincing some sucker to buy them before their product falls on its face.

Re:...letmegetthisstraight

[gnasher719]

Wait, does it not encrypt the magstripe data before transmission?

The card reader wouldn't be able to read it if it was encrypted.

Google seriously missed the boat

[thegarbz]

I can't help but think that Google has seriously missed the boat when it came to mobile payment. Google Wallet was compatible with Android smartphones, ... and released in one of the few countries in the world where NFC terminals were uncommon.

Seriously I was doing payments using Google Wallet on a Galaxy S3 years ago at any random terminal. The problem was jumping through major hoops to get around the fact that the service wasn't available in countries which actually have NFC terminals. Not only were there hoops, but Google considered them loopholes and slowly shut them out.

So now while mobile payments is the latest hot thing I am unable to do now something that I was able to do about 3 years ago. What a missed opportunity to be a market leader rather than a poor follower.