According to the folks at Re/code, Samsung paid about $250 million to acquire LoopPay, developer of the magnetic secure transmission (MST) technology that will form a key part of Samsung Pay when it launches later this year, in an effort to grab the mobile payment market share and to better compete with the likes of Apple Pay, Google’s Wallet and PayPal.
Samsung disclosed the acquisition of LoopPay in February, without giving any financial specifics. Then in March, Samsung announced it would offer a mobile payments option as part of the new Galaxy S6 phones, dubbed Samsung Pay, closely mirroring the LoopPay approach.
LoopPay’s technology allows Samsung’s new phones to mimic a regular card swipe, meaning that Samsung Pay should work everywhere that currently accepts card payments. This gives it an advantage over Apple Pay which requires the retailer to accommodate NFC transactions., and it might be potentially accepted in tens of millions of locations around the globe.
Samsung Pay has yet to be officially released but according to a report from last month, the service is expected to go live in the second half of 2015. Whether or not it will be able to compete with existing mobile payments services remains to be seen, but hopefully Samsung will be able to get something out of the $250 million they invested in it.