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On March 1, Samsung will hold an event that will likely introduce us to its next flagship phone, the Galaxy S6. We’ve heard reports of the phone having a metal casing instead of plastic and a reduced touch of TouchWiz, Samsung’s twist on Google Android and a Samsung processor powering the phone. Perhaps all that’s missing is a way for Samsung to challenge Apple Pay. Or maybe that’s in there too with a combination of integrated fingerprint sensor and LoopPay.
That’s the news out of Korea where DDaily suggests a Samsung and LoopPay partnership is likely for the new phone. And it would validate reports from this past December that suggested the two companies were in talks.
LoopPay is already available as a third-party payment system and it uses magnetic waves to replicate the magnetic stripe of a traditional credit card. The company says that secure tokenization — an approach used with [company]Apple[/company] Pay that hides actual account numbers from merchants — is coming in 2015 and that its technology can be fitted into nearly any mobile device. It currently sells smartphone cases, for example, that can be used for mobile payments in more than 10 million locations worldwide.
The current challenge with LoopPay and other universal cards is that they rely on magnetic stripe transactions to make payments, and that technology is getting phased out in the U.S. starting this year in favor of more secure smart chip cards using the EMV standard. As that happens, LoopPay’s current technology will stop working for credit and debit card payments, though it could still story loyalty and gift cards as well as IDs that use a mag stripe.
While LoopPay can move with the standard, it would need to work closely with the banks to access the tokens and cryptograms they are using in place of static credit card numbers, and so far none of the banks seem willing to work with any of the universal credit card makers. But LoopPay has [company]Visa[/company] — an investor — in its corner, and if this Samsung deal does pan out, it could provide the necessary momentum to bring LoopPay and the banks together.
This LoopPay video explains the details in full of how the technology works today.
When I watched the video, the magnetic coils reminded me of something that phones use for a different purpose: Wireless charging. I’m wondering if Samsung and LoopPay have figured out a way to “tune” the frequency of those coils to be used for both mobile payments and wireless battery charging. Even if they haven’t, it’s possible to fit two pairs of coils inside of a device to accomplish the same thing.
PhoneArena, which noticed the Korean media report, notes that the Galaxy S6 is expected to have a fingerprint sensor as well, which could be tied to LoopPay for additional security. Theoretically, then, putting LoopPay and biometrics together would rival Apple Pay and give Samsung customers similar features, which in turn could help turn Samsung’s smartphone sales around.