A Hit to the (Tangible) Wallet
By Nils Thorson
What Happened: Samsung recently acquired mobile payment company LoopPay. Though some say this is a move to compete with ApplePay, the relationship between Samsung and LoopPay started shortly after LoopPay’s launch in November 2013, before ApplePay’s introduction in September 2014. LoopPay uses Magnetic Secure Transmission (MST) technology, similar to how credit cards work. The MST technology is built into the LoopPay phone case, allowing users to press a button to pay while holding their phone next to where they would usually swipe their card. This technology is already available in 90 percent of U.S. retail locations. Samsung has announced plans to build the solution into smartphone hardware, allowing the technology to be used without purchasing the LoopPay case.
What This Means for Brands: With the ability to store credit cards, debit cards, gift cards, rewards cards and your driver’s license all on your phone, the days of tangible wallets could be numbered. For brands, it affects digital coupons and data. First, the marriage of digital coupons and digital payment would eliminate problems people have using digital coupons in a retail location (some people would rather not use them at all as to avoid looking foolish if the voucher is invalid or refused). Second, digital payments would allow brands a new set of purchase data to attach to consumers. This data could lead to better targeted ads, product developments and more.