Samsung in Talks to Launch Apple Pay Competitor

by Nikhil Joseph 0

In theory, integrating LoopPay’stechnology into Samsung phones would be a compelling idea and a sure way todemonstrate superiority over the iPhone 6’s Apple Pay. LoopPay allows consumersto make a contactless payment through a regular magstripe card reader that mostmerchants have in their stores to swipe through card payments. Recodereports:

“The technology would allow peoplewith certain Samsung phones to pay in the vast majority of brick-and-mortarstores by waving their phones instead of swiping with a credit card or cash.Samsung’s new smartphone is expected to be announced in the first half of 2015.

It is not yet clear if Samsung hasreached a deal with the startup, Burlington, Mass.-based LoopPay. One sourcesaid the deal could still fall apart. A prototype of the payments systemworking on a Samsung phone has been created, the other source said.”

Apple Pay is an exceptionalexecution of NFC-based payment technology. The only problem is that most iPhone6 users can’t find enough merchant locations that accept it. This is expectedto change with the coming network-mandated liability shift in late 2015 thatwill hold merchants responsible for fraud losses if they do not upgrade theirterminals to be EMV-complaint (and NFC ready in the process). However, ApplePay’s success at the Point of Sale, remains very much an open question, and outof Apple’s control to do anything about it.

For Samsung, the ideal scenariofor their next phone will be to produce a device that can not only match ApplePay’s seamless last-inch payment experience through NFC but also includes awell-functioning LoopPay functionality that works with merchants’ legacysystems until NFC becomes more prevalent. This will be a true game changer formobile payments adoption in the US. LoopPay’s technology, though, still has anumber of issues to work through, with many reviewers finding that it worksmaybe 8 times out of 10 in the best circumstances. This is certainly notsomething consumers will accept. Samsung, too, cannot afford anything less thanperfect for the next iteration of its flagship phone, given Apple’s reputationfor quality in the high-end of the smartphone market.

Overview by Nikhil Joseph, Analyst, Emerging Technologies for Mercator Advisory Group

Read full story at Recode

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