A growing chorus of rumors suggest Samsung will roll out its next flagship phone with LoopPay, a mobile payments technology that mimics cards through the use of a magnetic coil. There’s talk of the implementation being rebranded “Samsung Pay.”
The move isn’t surprising because Will Graylin, LoopPay’s CEO, has been as subtle as a jackhammer with hints about this. It’s just discombobulating, like getting a wedding invitation in the mail: your friend, someone you know, is tying the knot with Jennifer Laurence. Did I mention your friend only has several years to live?
Magnetic stripe, which powers LoopPay, will eventually become obsolete as EMV is rolled out. Aside from that obvious drawback (tick-tock), there are a few reasons why this coupling is surprisingly a good idea.
First, Samsung cannot afford to let Apple users have a feature they can’t match. The South Korean phone giant needs to take a bite out of Apple.
Second, LoopPay claims to be accepted at 90% of merchants today, while some estimates put Apple Pay’s merchant acceptance around 3%. That’s enormous merchant acceptance out of the gate.
But the most important reason is this: when LoopPay kicks the bucket, so does the marriage. When EMV forces mag-stripe the way of the dinosaurs, Samsung can transition Samsung Pay users into using NFC to make payments. In fact, it wouldn’t be surprising if Samsung Pay allowed users their choice of either mag-stripe or NFC payments. That type of “open marriage” would give Samsung a tremendous advantage in mobile payments. Provided, of course, that Samsung learns from past mistakes and educates consumers and merchants on how to use this new technology. However Samsung and LoopPay work together, it’s good to see the phone giant come to the table for mobile payments. Javelin forecasts that mobile proximity payments will account for roughly $35 billion in 2018. That’s a big pie, and it shouldn’t all be Apple.