Samsung’s recent acquisition of US based startup LoopPay is big news on the mobile scene. This will possible enhance the company’s ability and capacity to compete with the current market leader with regards to mobile payments — Apple.
The South Korean electronics giant announced the deal on Wednesday this week, although precise terms are yet to be made public. Details of the company’s acquisition (partnership) with Masschussets-startup LoopPay first surfaced in December 2014 following reports that Samsung was set to develop a product that would challenge Apple Pay.
Late on Board
Clearly, Samsung is late on the mobile payments scene, with Apple Pay having been in operation since September 2014, but the new service has a key advantage in that it’s compatible with magnetic-stripe card readers, which make the bulk of POS (point-of-sale) terminals. This is unlike Apple Pay and Google Wallet, which leverage NFC (near-field communications). More so, LoopPay supports both NFC and magnetic-stripe cards without requiring additional infrastructure. This essentially makes the service more flexible and perhaps even reliable than its competition.
The enhanced capabilities and additional convenience that LoopPay leverages is just what Apple needs to say this service gain widespread acceptance amongst merchants. This is critical to winning the mobile-payment market.
Great Strategy Move
Certainly, this acquisition is a smart strategy move on the side of Samsung Electronics. In the last few years, Sammy has been struggling to keep its market influence especially with the onset of cheaper smartphones manufacturers and more aggressive industry players. By extending its service sector, while continuing to invest in other areas, Samsung can easily become a billion-dollar entity.
This isn’t a cover-all situation though. Samsung will only be able to leverage the US market with LoopPay. Considered that Europe isn’t exactly a big fan of magnetic stripe technology, and that the mobile payment market growth in emerging regions is still slow, there’s only so much advantage that this can have.
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February 06 2017