Loop looks at the age old problem of magstripe and solves it with a mobile wallet
The US has had a painfully slow adoption rate for mobile payments at retailers and with consumers. It’s a battlefield that’s surrounded by a seemingly-endless number of competitors vying for the right way to drive consumers to paying with mobile instead of card.
However, now Loop has entered the game with Loop Wallet, it seems that they may well have been going about it all wrong.
Loop, the mobile payments startup that’s headed up by payments industry veterans, has released Loop Wallet to work around the current market situation and instead ‘trick’ POS terminals into thinking that a credit card has been swiped. The beauty of this is that you haven’t even had to carry the card on you, or remove it from your wallet. Instead, you just open up your Loop Wallet app, select the card you wish to pay for, and the Loop Fob emulates the magnetic signal for a card swipe using something the company calls “Magnetic Secure Transmission.”
The future plan for the Loop Wallet is to allow users to store far more than just payments cards on their phones, meaning that gift cards and reward cards could also stay snugly within the system. It’s not too far off from what we predicted would be the case with the success of the mobile wallet. Still, the issue of usability seems prevalent as a quick overview of the system from TechCrunch still reveals some of the smaller niggles sounding the app, mostly the reason that you have to select a card before swiping – which may well be slower than just using an actual card.
However, the advantage of Loop and Loop Wallet is that, not only does it have multiple cards and the potential for growth, but it also works with almost any magstripe terminal. This is obviously the major debilitating factor of NFC, if a store doesn’t support it, you can’t use it.
Loop also has a problem of only supporting iOS currently, and it still needs strong support to go up against bigger players for widespread adoption when it comes to reward card integration in the future.
Either way, Loop looks like it’s going to revolutionise the US payment scene in the near future. Now we’ll just have to see what happens when EMV comes along.