Samsung reportedly exploring an answer to Apple Pay

The peace between Samsung and Apple may prove to be short-lived.

Just as the companies are winding down their patent battle and deepening their relationship in the supply chain, news has broken that Samsung may be exploring an alternative to Apple Pay.

We can almost hear the lawyers readying their briefs.

Technology news site Re/code reported Tuesday that Samsung is in talks with LoopPay, a mobile payments startup, about embedding technology in the South Korean giant’s smartphones that would enable users to check out in most stores. It is unclear whether Samsung and the Burlington, Mass.-based company have struck a deal, but one source told Re/code that a prototype of the system has already been made.

Apple this fall unveiled a system that lets people with the iPhone 6 or 6 Plus buy items in stores by waving their gadgets at the register, rather than reaching for their wallets. Apple has touted the security of the system, which shares a unique token for each transaction instead of a credit card number. After some early successes, Apple Pay has reignited hopes that American consumers are finally ready to embrace mobile payments, a space that has flummoxed many tech companies.

Although Apple Pay may have given Samsung a greater sense of urgency, the South Korean company has long shown an interest in mobile payments, as the Wall Street Journal noted. Last year, the company released Samsung Wallet, an app that lets users store credit card information on Galaxy phones for online purchases.

If executed well, a partnership with LoopPay could help Samsung penetrate the retail world in short order.  LoopPay’s system is rooted in what the company calls magnetic secure transmission, which works by sending the information held in a credit card’s magnetic stripe at checkout. Because it builds on the traditional card swiping system, LoopPay already works in most  stores, according to testing by Re/code.

That could give it an edge over Apple Pay. Powered by near-field communication technology, Apple Pay is accepted by select retailers, though many more continue to sign on. Of course, with stores expected to phase out swiping over time, LoopPay may eventually have to change course, Re/code notes.

Above: Samsung is reportedly exploring an answer to Apple Pay (Justin Sullivan, Getty Images).

 

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