It is not yet clear if Samsung has reached a deal with the startup, Burlington, Mass.-based LoopPay. One source said the deal could still fall apart. A prototype of the payments system working on a Samsung phone has been created, the other source said.
LoopPay's technology transmits the information stored on a debit/credit card through a magnetic signal to the payment terminal; however, LoopPay does not require NFC or any other wireless standard, so it can by used at most payment terminals found in stores. Apple Pay and Google Wallet require stores to have upgraded terminals with NFC for their mobile payment systems.
While LoopPay currently lacks the security features of Apple Pay, CEO Will Garylin says LoopPay hopes to implement a tokenization system similar to Apple's when transmitting card information. Samsung's mobile payment system could also utilize fingerprint recognition, since the latest S5 includes a fingerprint sensor.
Apple Pay launched in October and since then the service has grown strong. Today the company supports over 90% of credit cards used for purchases in the United States.