Forty-four percent of smartphone users want the ability to make in-person purchases with their smartphone, according to Harris Interactive. Many companies have been attempting to find ways to consolidate payment methods into a single system and move this system onto smartphones. Loop is a new service that makes it easy for consumers to pay for goods using any type of payment method.
Loop can be used with many major credit card readers, which increases its utility. The Loop software and device installs on a mobile phone and stores all of your account information on the device itself. When you want to make a payment, you can select the card that you want to use and use it at almost any point-of-sale vendor. Many third-party payment systems such as Google Wallet require that the merchant have a specific type of payment system. Loop uses a special hardware system that connects to a smartphone to make payments, though it does still require that the merchant understand the system, especially if the merchant themselves has to swipe the device.
The Benefit of Consolidation
Post Consumers reports the average American has between three to four credit cards. Business owners often shuffle between business and personal cards making it difficult to always have them accessible. Many business owners find themselves intermingling their personal and business expenses for this very reason. The Loop device allows you to select which accounts you want to pay from on-the-fly, which has the additional benefit of not requiring you to take all of your cards with you all the time.
Available for Any Device
One of the major drawbacks of many of the consolidation systems available today are that they only work on a single phone system. The Loop device can be attached to virtually any smartphone, making it more versatile than the competition. Loop operates as a physical add-on that mimics a magnetic card strip. This magnetic card strip is altered on the fly to conform to the card you want to use. The fact that the Loop can be used just as easily as a credit card makes it more likely that consumers will begin using the device for purchases.
Some Drawbacks to Loop
The Loop device does, however, represent a security vulnerability to those that are not careful with their phone or do not password protect it. Once loaded, the device has access to information about all of your credit cards and payment accounts. However, the Loop device itself does have some security measures designed to keep your data safe. Since, according to the Federal Reserve, 48 percent of all smartphone users use their mobile phone to access their banking accounts, this isn’t a new risk to most consumers.
Loop may not be in everyone’s pocket yet, but it is one of the most robust third-party consolidation payment systems available today. Other systems, such as Only Coin, have not yet been released, are more expensive and are a little more foreign to use. As many smartphone users are already making purchases through their phones, it is natural that credit cards and debit cards themselves may start to transfer onto the devices.