• by Erik Sass , Staff Writer, December 24, 2014

Ever since Apple Pay debuted in October, it seems like everyone and their mother is working on a mobile payment service of their own (seriously, ask your mom about her beta). Now Samsung is preparing to enter the ring, according to Re/Code, which reports that the Korean mobile device maker is in talks with LoopPay, a startup that enables mobile payments at exiting card readers using secure magnetic transmission.

Samsung’s system would combine fingerprint scanning technology on the latest Galaxy handset, similar to Apple’s system for verifying the identity of the mobile device user, with LoopPay’s technology, which basically allows smartphones to mimic credit cards’ magnetic signatures, meaning retailers don’t have to replace their legacy card readers with fancy new mobile kit. The system would also use “tokenization,” which converts money into secure “tokens” that provide no storable data to retailers. 

LoopPay’s mobile payments solution does require additional hardware, in the form of a specially designed smartphone case containing the magnetic signature components. The startup’s other products allow consumers to pay with a key fob or electronic card.

LoopPay claims to already be accepted at over ten million merchant locations across the U.S., through relationships with merchants like Target, Macy’s, Starbucks, and Walmart. The startup recently announced strategic investments from Visa and Synchrony Financial, a major private label card issuer.

While tech firms are bullish on mobile payments, it remains to be seen if consumers will develop the same enthusiasm, given their worries about payment security. This week a survey of 2,011 U.S. and U.K. consumers by One Poll found that just 1% of those polled believe third party mobile payment services such as Apple Pay or Google Wallet are a safe way of making in-store purchases.

Last month a survey of 4,200 U.S. households conducted by Phoenix Marketing International found that two-thirds said they would rather use a mobile app from a bank, versus less than a third who said they would opt for Apple Pay. 65% said their main concern about Apple Pay was the security of their private financial information.