The launch of Apple Pay prompted many of the company’s competitors to whip up their own alternatives to the mobile payments service. Google already had its own service, Google Wallet, but Samsung was forced to acquire an existing service in order to compete with Apple. Known as LoopPay, the deal that Samsung made to acquire the American startup was kept secret, but we have it on good authority that the acquisition cost somewhere around $250 million.
What’s the price of competing with Apple, Google and PayPal in mobile payments? For Samsung, about $250 million. That’s about how much the Korean phone maker spent earlier this year to acquire LoopPay, a Massachusetts-based startup whose technology will be used in the Samsung Pay mobile payments system when it launches later this year, according to multiple sources. With earnouts, that number could rise based on executive or company performance. The terms of the earnouts are not known. A Samsung spokeswoman and LoopPay CEO Will Graylin both declined to comment. LoopPay invented a technology that originally allowed shoppers to pay for purchases in stores by placing a special piece of hardware — such as a fob or a smartphone case — near where you would normally swipe a credit card. With the acquisition, Samsung is embedding the LoopPay technology into its new phones, so shoppers can tap and pay with a new Samsung Galaxy 6 rather than whipping out a credit card or cash.