Samsung has acquired mobile payments specialist LoopPay as a way to provide its smartphone customers with improved mobile wallet features and to take on Apple Pay.
David Eun, executive vice president of Samsung's Global Innovation Centre, said that LoopPay's relationships with banks, card networks and merchants complement Samsung's position in the mobile payments arena.
"Through this deal we can significantly accelerate our mobile commerce efforts," he said.
The acquisition follows Samsung and LoopPay's existing relationship, in which Samsung joined Visa and Synchrony Financial to channel investment into the contactless payments specialist.
LoopPay will provide Samsung with access to its mobile payment technology, which converts existing magnetic stripe card readers into contactless payment receivers.
The magnetic secure transmission (MST) technology works in conjunction with LoopPay's app, which stores a user's card details allowing them to make contactless payments with a mobile device.
LoopPay's technology differs from that of Apple Pay, which is reliant on shops having access to near field communication (NFC) payment units.
LoopPay claims that MST is compatible with around 90 percent of existing payment terminals in the US, pointing out that Apple Pay works in less than five percent.
MST means that merchants can offer contactless payments without needing to invest in NFC terminals and supporting infrastructure, arguably giving Samsung an easy way to expand the contactless payment options in its smartphone portfolio.
Will Graylin, chief executive at LoopPay, said that the company's contactless technology "provides more value from card issuers and the merchants that serve them".
Graylin also explained that Samsung shares LoopPay's goal to create more secure smart wallets and improve the way mobile payments are carried out.
LoopPay will be an independent team under Samsung's corporate banner, and remain based at its Boston headquarters.
Further details of the acquisition were not revealed, despite V3 contacting both companies.
Samsung did not reveal how it plans to integrate LoopPay into its smartphones, but the firm could well showcase mobile devices with the payment capabilities at Mobile World Congress in March.
Apple may be reliant on NFC technology for its iPhone contactless payments, but a partnership with Visa to roll out Apple Pay across Europe could maximise its impact across the continent.
Latest Tesla news: Tesla stock price tanks amid reports of 'widening probe' by SEC and claims the base Model 3 loses money
SEC 'probe' takes its toll on Tesla as new research suggests that Tesla loses $6,000 on every $35,000 Model 3
10nm Cannon Lake Core i3-8121U CPUs make a rare outing with Intel's NUC mini PC
'Notorious' Australian child hacker thought he had executed 'flawless' hack
The former employee says that Tesla fired him for bringing the accusations to management internally