Loop launches secure mobile wallet with credit card fobs
The ability to make payments with your smartphone using near-field communication (NFC) technology has been touted for some time as a means of providing greater convenience and security. In order for that to happen, however, both the user and the retailer must have NFC-enabled devices. Mobile payments business Loop has circumvented this requirement by using technology that is already built into the vast majority of payment terminals.
Instead of using NFC technology, Loop has designed a system that turns the magnetic stripe reader of a bog-standard card machine into a receiver for mobile payments. Users download the Loop Wallet app and load all of their card details onto their phone by swiping each card using the Loop Fob or a card reader. Payments can then be sent to a card machine by pressing the Loop Fob or ChargeCase (an enhanced phone cover) against the payment terminal. The devices use a magnetic induction loop – hence the company's name – to transmit card details to the card machine's stripe reader.
Loop says that its fob and ChargeCase will work with 90 percent of card machines, and will also work with vending machines that accept card payments. They will not work with gas station pumps and devices that pull the card into their reader, such as ATMs. The company recommends that users carry at least one card with them at all times in case a machine is not compatible or the Fob or phone to which a ChargeCase is connected runs out of charge, although the ChargeCase will also provide up to 60 percent more battery life for an iPhone.
According to Loop, the Fob will last for about 300 transactions per charge. Its battery level is shown in the LoopWallet app, and users are notified when its battery life falls to 20 percent. The ChargeCase simply requires the user's phone to have power. It cannot be used independent of that phone.
The company also says that its system has the highest level of Payment Card Industry (PCI) security. LoopWallet user IDs are verified against cards, so that no one can swipe your credit card against their Loop devices and begin using your card details for payments. The LoopWallet app itself is password-protected – and doubly so if the user has a lock on their phone. Data stored on the Fob is encrypted and a time limit can be set from when the Fob is disconnected from the phone, after which it will no longer work. When making payments, the system also uses dynamic card data so that card clones cannot be made if the data is intercepted.
Loop is currently only available in the US, but an international roll-out is planned. The LoopWallet app can be downloaded for free on iOS, with an Android version due in the first half of this year. The Loop Fob is available now from the company's website retailing for US$39, while the ChargeCase can be pre-ordered for $99.
The video below provides an introduction to Loop.