(Pocket-lint) - In an attempt to spearhead the mobile wallet space while simultaneously taking on Apple Pay, Samsung has announced that it is acquiring LoopPay.

Although the financial terms of the deal were not disclosed, many other details were hinted, including Samsung's potential end-goal and how LoopPay will benefit the company going forward. We've also added our two cents below, helping to paint a clearer picture as to why LoopPay might help Samsung take Apple down a peg.

What is LoopPay, and how does it work?

Loop is a mobile payments startup that invented a unique mobile wallet technology called MST.

The technology allows you to pay at nearly any point-of-sale checkout across the US. The unique aspect is that you don't have to own a particular mobile device, such as NFC-based smartphones, because you use a fob dongle (or a charge case held close to a magnetic stripe reader, etc) that plugs into any Android or iOS phone and does the checking out.

samsung isn t sweating apple pay because it bought looppay here s how it works image 3

The two-step payment process works like this: LoopPay's app manages and securely stores all your payment cards (including credit, debit, loyalty, and gift cards) on a mobile device, while the LoopPay device (LoopPay Fob, ChargeCase, Card, or CardCase) processes your payment at the checkout as if you had swiped your card like usual.

You can read more about how MST technology works here.

Why does Samsung want LoopPay?

Samsung's acquisition of LoopPay is for both talent and technology purposes.

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Samsung had an existing relationship with LoopPay, in which Samsung’s Global Innovation Center was a strategic investor in LoopPay and contributed to LoopPay’s development. Reports first surfaced last year about the two companies working together, though Samsung has apparently skipped any partnership deals and just bought the company outright.

LoopPay is currently accepted in over 10 million stores, so Samsung is now free to tackle the mobile wallet space with an advantage. Android users have several mobile wallet options, including Google Wallet, but there isn't a standout Apple Pay competitor. Samsung will probably position LoopPay to be a solid mobile payment solution.

Samsung is hoping LoopPay will help it to provide "seamless, safe, and reliable mobile wallet solutions," and as part of the acquisition, LoopPay founders Will Graylin and George Wallner will also work closely with Samsung’s Mobile Division. The idea is that LoopPay will not only rival Apple Pay but also entice users to be interested in Samsung's devices.

David Eun, EVP of Samsung’s Global Innovation Center, suggested the LoopPay buyout should take things up a notch and accelerate Samsung's mobile commerce efforts: "LoopPay’s outstanding leaders and team have deep-rooted relationships with banks, card networks and merchants that will complement those Samsung has established."

Are LoopPay's devices only Android-compatible?

In its current form, LoopPay supports iOS 7 and above and Android 4.3 and above.

  • LoopPay Fob: iPhone 4, 4S, 5, 5C, 5S, 6, and 6 Plus, and many Android smartphones
  • LoopPay ChargeCase: iPhone 5 and 5S
  • LoopPay Card: iPhone 5, 5C, 5S, 6, or 6 Plus, and many Android smartphones
  • LoopPay CardCase: iPhone 5, 5S, 6, and 6 Plus

Does the LoopPay app also safely store IDs?

Yes. In addition to payment cards, the LoopPay app also stores IDs, loyalty, and membership cards. And everything is safely protected by passwords, PINs, and encryption.

Does LoopPay cost anything?

You just have to pay for a LoopPay device. There are no extra transaction costs or fees for using the LoopPay app.

Want to know more about LoopPay?

Check out LoopPay's Getting Started and Help hub for more details.

Writing by Elyse Betters.