LoopPay powers payment tech on Samsung’s new phones

Samsung unveiled the Galaxy S6 series at the Mobile Web Congress in Barcelona, Spain. (Photo by David Ramos/Getty Images)
Samsung unveiled the Galaxy S6 series at the Mobile Web Congress in Barcelona, Spain. (Photo by David Ramos/Getty Images)

The new flagship smartphones from Samsung Electronics will include a mobile payment system developed by Burlington-based LoopPay that could give Samsung a badly needed boost in its bitter rivalry with Apple’s iPhone.

Samsung introduced the new Galaxy S6 and Galaxy S6 Edge phones at the Mobile World Congress trade show in Barcelona. Samsung acquired LoopPay in February for an undisclosed amount, but a LoopPay spokeswoman said that the two companies have been working together for months to integrate the LoopPay service into Samsung’s new phones.

Apple’s hugely successful iPhone 6 features Apple Pay, a system that uses a built-in chip to let users make credit card payments by tapping the phone against a payment terminal. But nearly all retailers use terminals that read the magnetic strip on the back of a credit card. Only a few hundred thousand of America’s 3.8 million merchants have terminals that are compatible with Apple Pay.

LoopPay’s system transmits card data to the magnetic strip reader inside traditional payment terminals. The company estimates that LoopPay is compatible with about 90 percent of all US retail terminals.

The original LoopPay system requires the user to purchase a special smartphone case, containing the LoopPay radio. But Samsung has built LoopPay right into the S6 as part of a mobile payment system called Samsung Pay. The new phone will also include a chip-based payment system that will work in much the same way as Apple Pay, as well as a fingerprint scanner to ensure that only the phone’s owner can use it.

By offering a mobile payment system that will work in far more locations than Apple Pay, Samsung hopes to push back against the spectacular success of the iPhone 6. Sales of last year’s Galaxy S5 fell far short of expectations. Meanwhile, in the quarter ending last December, Apple generated the highest quarterly profit ever earned by a corporation, largely due to massive iPhone sales.

Hiawatha Bray is a technology reporter for the Boston Globe. E-mail him at h_bray@globe.com.
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