Mobile Payment: The Battle for Supremacy


The mobile payment war is alive, well and definitely hopping! Mobile sales accounted for 22 percent of Cyber Monday’s 2014 online sales. This was up 27 percent from 2013, according to IBM Analytics. And as this article pointed out, Best Buy’s website also experienced several hard outages on Black Friday due to some “concentrated spike in mobile traffic.” This will lead to retailers trying to improve their mobile sites and apps in 2015, which includes mobile payments.

On October 31, 2014, we posted right here on the Echo blog Why the Apple Pay War is doomed. Well on February 18, 2015, Samsung jumped into the fray when they agreed to acquire Loop Pay.

Consumer Reports compared four major mobile pay systems—Google Wallet, Softcard, Loop Pay and Apple Pay. Of these, Loop Pay was determined to be the most consumer friendly. But what makes Loop Pay so different from Apple Pay and other mobile payment systems?

Mobile payment systems like Apple Pay and Google Wallet rely on stores to have near-field communications (NFC) capability, whereas Loop Pay does not. They use a patented technology called Magnetic Secure Transmission™. This technology emits a magnetic signal that the normal credit card reader recognizes as a swipe. This system can also be used by a wide variety of smart phones including the iPhone 4-6+ and a whole host of Android phones. Loop Pay claims that it works in about 90% of retail stores, compared to 5% for Apple Pay.

Here’s how it works:

Loop Pay is a phone accessory and app. Currently, it comes as an iPhone case and Android keychain fob. You open the app on your phone and register as many credit/debit cards as you like. As Geoffrey Fouler, of the Wall Street Journal, describes: to pay, open the app, enter a Loop Pay specific PIN and hold the phone close to the merchant’s card swipe slot. The fob or “dongle” can also be removed from the phone and handed to the cashier. The cashier just has to press a physical button on the device to emit the magnetic signal. This allows the payment to work even if your phone has died.

But as Fouler also explains, “it puts you in the awkward position of being an ambassador for a new kind of [technology].” Many merchants may not know of Loop Pay and mistake your leaning over to wave your phone close to their register as an attempt at using Apple Pay. Then you “tech-educate” them on this new mobile payment system, and go on your marry way—another soldier in the mobile payment war.

Samsung hasn’t yet released how they plan on implementing Loop Pay into their phones, but it stands to reason that they plan on making some hardware and software adjustments. It’s possible the Magnetic Secure Transmissions™ will be built directly into Samsung phones, allowing Samsung users to pay mobally at more than 10 million stores and restaurants.

“Our goal has always been to build the smartest, most secure, user-friendly mobile wallet experience,” said JK Shin, Samsung Electronics’ President and Head of IT and Mobile Division. And they’re certainly making an effort to challenge Apple Pay.

What do you think? Would you like to use a mobile payment system? Have you? What was your experience?