Samsung will buy mobile payments company LoopPay in a direct play against rival Apple's own payments platform.
The companies today confirmed reports of an impending acquisition that surfaced in December last year. Samsung will acquire LoopPay - a mobile wallet solution provider - for an undisclosed amount.
LoopPay's technology turns existing magnetic stripe readers in point-of-sale (PoS) terminals into contactless receivers, Samsung said, meaning the service can be used in the majority of physical retail stores.
A case attached to certain smartphone models communicates with the retailer's payment terminal as well as a mobile application, which allows the user to enter and store their payment information.
LoopPay directly advertises itself as a competitor to Apple Pay for non-iOS devices, claiming its service works on more phones, at more merchants and with more cards than the Apple platform.
The company's founders Will Grayling and George Wallner will join Samsung’s mobile division as part of the acquisition.
Samsung executive vice president of global innovation David Eun said the acquisition would help the company develop and launch its own mobile wallet solution.
“Through this deal we can significantly accelerate our mobile commerce efforts. LoopPay’s outstanding leaders and team have deep-rooted relationships with banks, card networks and merchants that will complement those Samsung has established over the years," he said.
Samsung will unveil its Galaxy S6 smartphone at the Mobile World Congress in Barcelona next week, at which point it may also debut its new payments service.
Apple launched its Apple Pay solution last October following the release of its iPhone 6.
The contactless payment system - which is only currently available in Apple's iPhone 6 models - involves an embedded NFC chip, a secure element to store encrypted payment details, Apple’s TouchID fingerprint technology, and its existing Passbook application.
Apple has partnered with the three major payments networks - American Express, Visa and Mastercard - alongside a number of US banks and retailers to offer the service.