US mobile payment firm LoopPay wins Visa funding
Mobile payments provider LoopPay has secured funding from global payments firm Visa, the company has revealed, without saying how much is involved.
The US company, which launched earlier this year, is pioneering a technology that capitalises on the installed base of magnetic stripe-reader point-of-sale systems rather than NFC, which is the current favourite in mobile payment circles.
LoopPay’s Magnetic Secure Transmission (MST) technology means existing point-of-sale infrastructure can be used to receive contactless payments from mobile devices of all kinds with no hardware changes required by merchants. The technology itself is largely based on the same responsible for inductive charging of devices.
On the consumer side, LoopPay provides a smartphone app and a fob or iPhone case that can read and store credit and debit card info. When a specific card is selected in the smartphone app and the fob or phone case is held against the mag stripe reader on the POS, the technology is able to manipulate the magnetic field on the POS just long enough to transmit the required information in an encrypted state.
Jim McCarthy, senior vice president of innovation and strategic partnerships, Visa, said: “LoopPay has developed compelling technology that has the potential to enable merchants to accept payments from mobile devices using their existing point-of-sale infrastructure.”
Payment cards, gift cards and loyalty cards can be securely loaded by consumers to their own LoopPay-enabled devices, or remotely provisioned by card issuers after proper user authentication and account setup.
But at present the technology is only available in the US where mag stripe reader card transactions are still prevalent and as a result is unlikely to travel further afield where NFC-based technologies are the flavour du jour for replacing card-based Chip & PIN transactions.