The Samsung-Apple rivalry has entered the mobile payments space: Samsung has acquired Boston-based mobile wallet solutions provider LoopPay for an undisclosed amount. LoopPay makes cases for popular smartphones with its technology built into it, that turns existing magnetic stripe readers into mobile contactless receivers. Following the acquisition, LoopPay founders Will Graylin and George Wallner are expected to start working with Samsung’s Mobile Division. LoopPay currently claims that 10 million merchants use its platform.

Very little detail is available at present regarding what Samsung plans to do with LoopPay, though the company told TechCrunch that it won’t be restricted to just mobile payments and the goal will be to offer a mobile wallet service.

Last year in December, it had been suggested that Samsung would be introducing a mobile payments solution in partnership with LoopPay on its Galaxy S6 smartphone. The Galaxy S6 is scheduled to be formally launched at the World Mobile Congress (WMC) in Barcelona on March 1. Medianama will be present at WMC, and we will update the story with any new developments on this front.

Samsung, along with Visa and Synchrony Financial, had already invested in LoopPay in July 2014, after spotting its Kickstarter project that ended in November 2013. With Samsung and Visa as backers, LoopPay is likely to get the mainstream acceptance it hasn’t so far.

Impact: The advantage LoopPay presents is that it doesn’t require any extra investment on part of the merchants or their payment processors. In emerging markets like India that can prove to be crucial. LoopPay claims that its technology is compatible with most existing point-of-sale (PoS) terminals, while other mobile payments solutions (including Apple Pay) use Near Field Communications (NFC) technology, which still has limited adoption in emerging markets. It’ll be interesting to see if Samsung launches its mobile payments solution concurrently in India and other emerging markets along with the USA or not.

How it works: Users will have to install the LoopPay app as well as purchase a LoopPay cardcase for their phones. Then they need to setup a LoopPay account, connect the case with the phone and load all payment card details, including debit and credit cards, gift cards, and loyalty cards among others to the account. To pay using LoopPay, users need to rest the LoopPay device against the card swipe slot where debit/credit cards are usually swiped and press the button. Alternatively, users can open the LoopPay app, enter the PIN and select the card they wish to pay with and tap the image of the card on the screen, and the payment is made. More on this here.

Competition: Apple Pay is quite clearly the primary competitor. The four-month old service is reported to have a 1.7% market share of the mobile payments segment in USA, in comparison to three-year old Google Wallet’s 4% market share. Note that Apple probably has one of the largest, if not the largest active credit card base in the world right now, with most of its 800 million iTunes accounts having a credit card on file, as of April 2014.

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Image Credit: LoopPay