Samsung confirmed it will purchase startup mobile wallet developer LoopPay.
Last December, LoopPay chief executive Will Graylin told Re/code his company would finalize a deal early in 2015 to embed its technology in a major smartphone maker’s hardware that would deliver “massive penetration.”
At the time, Graylin declined to identify the smartphone maker to which he referred but it wasn’t hard to guess Samsung was the two-year old, Burlington, MA-based startup’s likely suitor. And, lo and behold, late last week Samsung said it will acquire LoopPay in a deal whose terms and conditions were not disclosed but provides the digital wallet developer with instant visibility and legitimacy.
The transaction calls for Graylin and LoopPay co-founder George Wallner to work with Samsung’s mobile division in a collaboration the companies said will strengthen the Korean manufacturer’s intention to offer users “seamless, safe, and reliable mobile wallet solutions.”
Officials said LoopPay brings talent and technology to the party while Samsung supplies its mobile platform, global presence and distribution, all of which will result in the “next wave of innovation in the digital smart wallet.”
Samsung has an existing relationship with LoopPay as an early strategic investor along with Visa and Synchrony Financial.
“This acquisition accelerates our vision to drive and lead innovation in the world of mobile commerce,” said JK Shin, Samsung Mobile Division president and IT head. “Our goal has always been to build the smartest, most secure, user-friendly mobile wallet experience, and we are delighted to welcome LoopPay to take us closer to this goal,” he said.
Graylin said the deal maps to LoopPay’s strategy to deliver a “digital wallet solution that is dependable for consumers around the world, one that provides more value from card issuers and the merchants that serve them,” adding the agreement will help to “unlock the limitless possibilities of mobile enabled commerce.”
LoopPay’s technology works on existing versions of Samsung’s Galaxy smartphone line and Note phablet lines and other Android devices as well as Apple’s iPhones.
LoopPay’s Magnetic Secure Transmission payment system converts in-store payment terminals that typically accept credit cards into a reader of its technology, meaning stores and restaurants don’t need special equipment to accept LoopPay payments on enabled mobile devices. Users simply tap a LoopPay enabled device on a payment terminal to complete a purchase transaction. In effect, the LoopPay technology mimics a card swipe in that it wirelessly transmits the same information contained on a credit or debit card’s magnetic stripe to the store’s payment terminal.
According to LoopPay, its technology works on a wide variety of iOS and Android devices, including the iPhone 6, 6 Plus, 5, 5s, 4, 4s, Samsung’s Galaxy 4, 5, Note 3 and 4, and phones from HTC, Huawei, LG, Motorola, Oppo, Xiaomi, ZTE and others. The developer claims its technology is available at some 10 million retail locations.