Samsung’s LoopPay Breached; Verizon Supports Samsung Pay (Oct. 8, 2015)
There’s never a good time for a data breach, but yesterday it was reported that LoopPay, a subsidiary of Samsung Electronics Co., suffered an attack on its network. The timing of the news is more than a bit of bad luck—and timing—for Samsung as it launched Samsung Pay in the U.S. late last month and the company is in the midst of a seven-city U.S. tour to promote the mobile payment service that is going head to head with Apple Pay, among other similar services.
On Samsung’s Website, the company reported that the breach was an “isolated incident” that targeted LoopPay’s office network, which handles email, file servers and printing within the company. LoopPay’s network is physically separate from Samsung’s and the incident, which has been resolved, had nothing to do with Samsung Pay.
“Samsung Pay was not impacted and at no point was any personal payment information at risk. … We’re confident that Samsung Pay is safe and secure. Each transaction uses a digital token to replace a card number. The encrypted token combined with certificate information can only be used once to make a payment. Merchants and retailers can’t see or store the actual card data,” according to the company statement. Samsung acquired LoopPay in February and the mobile payments startup is responsible for the technology that enables magnetic stripe cards to be processed as contactless transactions at traditional payment terminals.
Although the breach was brought to light recently, Chinese hackers gained access to LoopPay’s office network around March and the breach was discovered in August, according to reports. As soon as the incident was discovered, LoopPay brought in two independent professional security teams, identified the problem, conducted a thorough sweep of LoopPay’s entire system and put additional safeguards in place, according to Samsung.
On the bright side, Verizon, the last holdout among the major U.S. carriers, finally announced its support of Samsung Pay via Twitter on Tuesday. “Samsung Pay will be supported on compatible Verizon smartphones (Galaxy S 6, S 6 edge, Note5, S6 edge +) through a future software update,” the company tweeted.