Can Samsung's LoopPay Beat Apple Pay with Point-of-Sale Advantage?

Samsung is taking on Apple Pay with its acquisition of LoopPay, a mobile payments startup. The deal gives Samsung, the world’s biggest smartphone manufacturer, the opportunity to offer its Android customers the ability to pay for goods and services with their smartphone.
Apple’s new mobile payments platform, Apple Pay, has surged quickly to become the most promoted and recognizable smartphone payments facilitator, with TV commercials featuring credit card networks and banks promoting the months-old system.
For Samsung, it’s not just about competing with Apple Pay. It’s also about looking to software and services for new streams of income, since smartphones that run Google’s Android mobile operating system, as do most Samsung phones, are becoming less and less profitable.

“We’re thinking more about software and how to integrate it well with hardware,” said David Eun, head of Samsung’s Global Innovation Center. “One area that’s really ripe to create compelling experiences is payments and commerce.”
Boston-based LoopPay’s technology is compatible with an estimated 90 percent of in-store, point-of-sale terminals across the U.S. LoopPay boasts of this advantage over Apple Pay, which currently works at less than 5 percent of retail locations.
Samsung invested in LoopPay in July of last year.
“None of us even knew that Apple Pay was going to launch when we first started working together,” LoopPay CEO Will Graylin, told USA Today. “A lot of the focus was really how do we solve a bigger problem, which is consumer adoption. And consumers are not going to adopt if they can’t use a vast majority of their cards at a vast majority of merchants. Which has always been a barrier.”
LoopPay currently is available as a free app, but you also have to order some LoopPay products for the total package, such as a card case ($59.95) that holds a small, battery-powered plastic “LoopPay card” inside ($49.95). The LoopPay CardCase has a slide-out device with a magnetic loop that can mimic a regular credit-card swipe when placed up against any regular credit-card terminal.
When shopping, a customer can simply rest his LoopPay card case against the credit card swipe slot, where shoppers usually swipe their credit card, and press a button. LoopPay also has a standalone fob that can be used much like a keychain.
LoopPay says it encrypts all data to prevent access or use by others. Cardholder information is authenticated to prevent others from loading your cards, LoopPay says on its website. LoopPay also offers a card reader to easily add your credit cards to your smartphone.
Facilitating the process for consumers at the point-of-sale is the biggest challenge, Grayline says. LoopPay is adaptable to dozens of smartphone brands, including Samsung, Nexus, Motorola, and Apple’s iPhones.
“The real competition is the consumer’s existing wallet, and their habits,” he said. “If we are to win against that competitor we need to be able solve some fundamental problems and make the digital wallet more useful.”

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