The metal coil shown here doesn’t look like much. Just some looped copper.
But if you run an alternating current through it, the coil will produce a magnetic field. And if you create the right kind of magnetic field, the coil can communicate with a standard credit card reader.
That’s how LoopPay works.
LoopPay is a mobile payments startup that lets you load your credit cards into an accessory, like a smartphone case or dongle, and make payments just by tapping it against a standard magnetic credit card reader.
LoopPay’s technology can be built into a lot of things like keychain fobs, dongles, and smartphone cases. The company just launched a new case that fits the iPhone 6 and formed a partnership with some third-party case makers for other devices.
But the real exciting prospect for LoopPay is that it can also be embedded directly into smartphones, offering handset makers their own answer to Apple Pay. (Apple Pay doesn’t work with standard credit card readers, only special NFC payment pads.)
A few weeks ago, Jason Del Rey of Re/code reported that LoopPay was in talks to embed its technology into a new phone Samsung is launching this year, possibly the new flagship Galaxy S6.
In an interview with Business Insider at the Consumer Electronics Show, LoopPay’s CEO Will Graylin wouldn’t comment on that specific rumour, but he did say LoopPay will be integrated in a smartphone by the end of 2015. (Sooner rather than later, too.)
If LoopPay does partner with Samsung (or someone else) on a flagship device that will be a pretty big deal. Samsung will immediately have a mobile payments system that works a lot more places than Apple Pay.
As long as a merchant has a regular credit card reader, you’re good to go. Graylin said LoopPay works about 90% of places that accept credit cards, thanks to a few exceptions like gas pumps. Apple Pay on the other hand is only supported by merchants with NFC readers, which are very rare. Plus, many big retailers like Target, CVS, and Best Buy refuse to accept Apple Pay right now.
And because LoopPay is an open platform, any phone or chip maker can add it to their products. Graylin said he’s received a lot of inbound interest already. If it pans out, LoopPay’s system could be more ubiquitous than Apple Pay.