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Contactless payments startup LoopPay is taking advantage of the excitement surrounding Apple Pay to introduce its new line of programmable credit card gadgets, including a new sleeve for the iPhone 6 and iPhone 6 Plus that can be used in much the same way as Apple’s new mobile wallet.
So why is LoopPay recreating a payments capability that already exists in newest smartphones in the iPhone line? Well, unlike [company]Apple[/company] Pay or any of the other near-field communications (NFC)-based smartphone payment systems, LoopPay can theoretically work with any current U.S. credit card and at the vast majority of businesses that accept payment in the form of plastic.
As I’ve detailed before, LoopPay isn’t using NFC, Bluetooth, QR codes or any other new contactless technology debuting in new cash registers and point-of-sale (POS) terminals. Instead, it’s tapping into the same old mag stripe readers available in nearly every terminal today by generating a magnetic field that emulates the card swipe.
LoopPay’s system does have drawbacks. It doesn’t have any of the new security features of other new NFC and QR-code-based payments apps or emerging chip-and-PIN transaction systems (it’s basically as insecure as the mag stripe credit card is today). Also, LoopPay’s technology won’t communicate with about 10 percent of the POS terminals in the market today. But covering 90 percent of retail stores is still far better than what its competitors can accomplish. According to LoopPay, its wallet is accepted at 10 million U.S. retail locations, while [company]Apple[/company] Pay, [company]Google[/company] Wallet and Softcard are accepted at a few hundred thousand locations with new NFC terminals.
There are some new elements to LoopPay’s design. Instead of keeping the payment element trapped inside the iPhone sleeve, LoopPay is making it removable. That way, consumers can hand a fob over to a waiter or sales clerk instead of parting with their phones. The case also has a hidden compartment for a driver’s license and backup credit card in case a consumer is required to show ID or happens to be at a place that won’t support LoopPay’s technology.
The cases for the iPhone 6 and 5/5s cost $49.95 each on the company’s website. LoopPay also offers a stand-alone fob for Android users that costs $39.95. The case for the iPhone 6 Plus is available for pre-order, but when it will actually ship seems to be up in the air. When asked, a spokeswoman for LoopPay’s PR firm first said that the iPhone 6 Plus case hasn’t yet been prototyped and there was no timeline for its availability, but in a follow-up conversation she said LoopPay expects to ship the larger sleeve by early next year.
Before you buy, though, keep in mind that this time next year the retail industry will begin moving to new chip-and-PIN payment systems, which will eventually make mag-stripe transactions obsolete. The mag-stripe reader won’t disappear overnight, though, as it will take years before retailers all have the necessary hardware in place.
This post was updated on Tuesday with information on the iPhone 6 Plus case’s availability.