LoopPay developed technology that could turn existing magnetic stripe readers into secure, contactless receivers. What started with an investment turned into an acquisition and, ultimately, the creation of Samsung Pay.
By the mid-2010s, Samsung had positioned itself as a leader in the smartphone industry and determined that tackling mobile payments would be among its new challenges. As near-field communication (NFC) and other contactless payment solutions became more prevalent, the need to develop a mobile wallet was clear.
LoopPay was already a Samsung Next portfolio company and its patented Magnetic Secure Transmission (MST) technology was on the rise when Samsung acquired the company in early 2015. The deal sent a message that Samsung was serious about its commitment to create a mobile wallet experience that was safe, reliable, and widely accepted.
“Samsung Next had a vision and it was instrumental in identifying the opportunity that came with LoopPay, financing the deal and making it happen,” said Sang Ahn, who was Samsung Next’s Head of East Coast Investments at the time.
The initial plan was to keep LoopPay as an open, platform-agnostic wallet. As leadership from Samsung NEXT and Samsung Mobile discussed things further, however, they saw the opportunity to integrate LoopPay’s groundbreaking technology into Samsung mobile devices.
Despite the original vision to keep LoopPay open, it was folded into Mobile and became Samsung Pay,” explained Ahn. “You cannot imagine the crush of the urgency to get this done quickly.”
A differentiating service reaching tens of millions of users
What started with Samsung NEXT’s investment in LoopPay led to its acquisition and eventually, the creation of a transformative product in Samsung Pay. Thanks to a process initiated by Next, what was once a 40-person startup had become an integral piece of a massive smartphone brand.
LoopPay’s mobile magnetic payment technology was a signature feature of Samsung’s flagship Galaxy S6 smartphone when it was introduced in early 2015. Samsung Pay was unveiled that fall, and by the end of the year, it had launched on over 30 million devices.
“Thanks to a process initiated by Next, what was once a 40-person startup had become an integral piece of a massive smartphone brand.”
Since its launch, Samsung Pay has rolled out a variety of enhancements and upgrades aimed at making it the most widely accepted mobile payment product in the United States.
Now five years into its existence, Samsung Pay continues to evolve and help consumers do more with their money. In addition to enabling contactless payments, Samsung Pay has partnered with major financial services firms like Chase and Sofi that give consumers exclusive benefits while also managing their finances.
Samsung’s integration of LoopPay into its Mobile division and development of Samsung Pay show how a global leader in hardware innovation can accelerate the adoption of new technology through smart investment and M&A practices. It also shows how Samsung Next is uniquely positioned to help founders with global ambitions to get their technology in the hands of tens or even hundreds of millions of users worldwide.