Does the legendary Samsung mobile payment service have a chance to succeed?

December 25 news, according to foreign media reports, Samsung developed mobile payment services, challenge Apple Pay is not surprising. After the release in late October, Apple Pay has been favored by users, accounting for 1% of the digital payment market in November.

Technology blog site Re/code reported last week that Samsung is working with startup LoopPay to launch a mobile payment service next year. Does Samsung have a chance to succeed in the field of mobile payment services?

Samsung mobile payment principle

First of all, it is worth pointing out that Samsung mobile devices have been supporting Google Wallet for a long time. Google Wallet is in trouble and Samsung wants to develop an independent mobile payment service. LoopPay uses different data transmission technologies than Apple Pay and Google Wallet. The latter two rely heavily on NFC (Close Range Communication) technology.

LoopPay's Magnetic Secure Transmission technology is patented to wirelessly transfer information from the magnetic stripe of a bank card. The main technology of LoopPay is compatible with existing cash registers and does not require merchants to upgrade the cash register infrastructure - this has been a major obstacle to the popularity of NFC-based mobile payment services.

Users need to use LoopPay products that can transfer magnetic stripe information from bank cards - key chains, card and smartphone shells, and LoopPay applications (with iOS and Android versions). LoopPay said that Samsung can embed the necessary hardware in the handset at a cost of less than $1.

LoopPay also plans to add token technology next year to further improve system security and store more credit card, gift card and loyalty card information. Visa also decided to invest in LoopPay.

How does performance in real life

Several technology media tested LoopPay technology earlier this year, including The Verge and Re/code. In most cases, the performance of the LoopPay service is the same as advertised, and compatibility with existing payment terminals means that there are more merchants who accept LoopPay than competitors using NFC. Of course, LoopPay also has problems with some retailers.

The most common complaint about LoopPay technology is the lack of hardware design and convenience, and the cashier is not familiar with it. In addition, as a startup company, LoopPay is not recognized by most people.

How Samsung Helps LoopPay Solve Its Biggest Problem

This is what Samsung is good at. If LoopPay technology can be integrated directly into smartphones, the hardware design of mobile payment services will be simplified, eliminating the need for cumbersome cases.

But popularity is the biggest challenge facing LoopPay. No one knows LoopPay. When a customer wants to pay for a purchase with a small keychain, the cashier can feel puzzled. Even in the LoopPay promotion video, the company’s chief executive explained to the female cashier that LoopPay functions exactly like an ordinary credit card.

If a cooperation agreement with LoopPay is reached, Samsung will have enough resources and will to invest in marketing activities to popularize LoopPay to the public. LoopPay is a cross-platform service, but Samsung certainly hopes that LoopPay service can become a feature of its own products and improve differentiated competitiveness. Of course, differentiation is only reflected in hardware integration.

According to media reports, Samsung is interested in developing fingerprint identification technology and challenging Apple's Touch ID, but the performance of Galaxy devices integrating fingerprint sensors is sluggish.

Where are the opportunities?

Working with LoopPay is both a wise move and a shortcut for Samsung to accelerate the rollout of mobile payment services. It took Apple several years to develop components of Apple Pay, including Touch ID. If Samsung is to be truly a "fast follower," it needs to provide alternative products as quickly as possible.

For LoopPay, cooperation with Samsung can quickly increase the popularity and popularity, but the two companies jointly launch services will be confusing to consumers. Cooperating with Samsung provided LoopPay with better opportunities for success. However, given the size of Apple and its ability to promote the popularity of mobile payment services, LoopPay still faces many unfavorable factors.