Samsung will buy Apple Pay competitor LoopPay
Steve Kovach / Business Insider :
Context & Ripple Effects
Samsung's acquisition of LoopPay caps talks that surfaced in December 2014, when Re/code reported Samsung was negotiating with the startup to field an Apple Pay rival in 2015 rather than build payments technology in-house. LoopPay's value to Samsung is a way to answer Apple Pay on hardware Samsung already ships at scale.
The deal set up the three-way race captured two weeks later in coverage of Samsung Pay versus Apple Pay versus Android Pay — and by May, sources put the price at roughly $250M ($250 million for LoopPay), making this one of the larger mobile-payments acquisitions of its moment.
First-order effects
- Samsung gains an in-house mobile-payments stack overnight, letting it launch Samsung Pay on Galaxy devices instead of licensing or waiting for Google's equivalent.
Second-order effects
- Apple Pay now faces a pre-installed challenger on Android's largest handset maker, forcing a comparison market where banks, carriers, and retailers can play Samsung against Apple and Google for terms.
Third-order effects
- If Samsung Pay scales the way the subsequent record shows — UnionPay launches in China with Apple striking its own UnionPay deal, then an Alipay tie-up — smartphone makers' payment systems become global platforms competing country by country with local rails, not just wallet features bundled with phones.
The trend: Mobile payments is consolidating into a platform war among device makers — Apple, Samsung, and Google — each buying or partnering their way into national payment rails.