Samsung Paid $250 Million to Compete with Apple Pay, Google Wallet
Samsung Electronics acquired the mobile wallet LoopPay in February for an undisclosed amount of money in an effort to compete with Apple Pay and Google Wallet. New reports now provide insight into just how much money Samsung was willing to spend to beat its competition–roughly $250 million.
The idea behind the acquisition was that Samsung would be developing a mobile wallet, dubbed Samsung Pay, on top of the existing LoopPay framework. LoopPay is a unique mobile wallet opportunity because it works with the current credit card system. It does this by wirelessly mimicking the magnetic stripe on the back of your credit card. When you hold the LoopPay case near the credit card swipe slot and press the LoopPay button, it sends an electromagnetic pulse with your credit card number to the credit card reader.
Apple Pay and Google Wallet require special NFC, or near field communication, readers.
Samsung estimates 90% of existing point-of-sale terminals can work with LoopPay without the need for new infrastructure, saving merchants money in equipment upgrades.
“This acquisition accelerates our vision to drive and lead innovation in the world of mobile commerce,” JK Shin, Head of the IT and Mobile Division at Samsung Electronics, said in a press release. “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.”
Samsung plans to launch its new mobile wallet sometime this summer.