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An important step to earning travel rewards is using a credit card that maximizes your purchases. But what if you don’t have the right card with you? Today, TPG Senior Points & Miles Correspondent Jason Steele describes a mobile payments solution that makes it easier to carry all your cards at once.
iPhone users tired of carrying a wallet bursting with credit cards were excited when Apple announced its new mobile payment system last year. Apple Pay enabled users to complete a transaction just by holding an iPhone 6 up to a credit card terminal.
This was a welcome advancement, and the attraction of mobile payment options is clear: it’s pretty convenient to have all your credit cards in one place. Tie that in with something like the TPG To Go app (which lets you know which card to use for a given purchase), and earning points and miles is suddenly a lot more convenient.
However, many people were left behind by Apple Pay. Not everyone has an iPhone, and plenty of others (like me) are perfectly happy with their smaller, older iPhones. In addition, Apple Pay only works with retailers that have chosen to participate. Today I’ll look at another mobile payments solution called LoopPay, which offers a similar service across a broader platform.
LoopPay’s Alternative Technology
While Apple Pay uses Near Field Technology (NFC), a radio communications system included in the iPhone 6 and some credit card terminals, LoopPay relies on an entirely different method of wireless communication with the magnetic stripe reader called Magnetic Secure Transmission (MST). This technology allows users to conduct transactions wirelessly by waving a mobile phone with an attached device or one of the LoopPay key fobs.
LoopPay’s patented technology uses a metal coil to create a magnetic pulse, which essentially tricks the magnetic stripe reader into believing that a credit card has been read. Another interesting aspect of this technology is that it’s compatible with any credit card, debit, or gift card with a magnetic stripe. The device is not currently compatible with EMV smart chip readers, but the company expects to release a compatible version later this year.
How it works
To test out this technology, LoopPay sent me a CardCase compatible with my iPhone 5 ($59.95 retail) and a LoopPay Fob ($29.95), which can also be used to make payments (especially if you don’t have an iPhone 5). The CardCase is simply an iPhone 5 case with a small, removable device attached to it, so it doesn’t physically alter your phone or drain its battery. There’s also a version called the ChargeCase that includes an extra battery.
To use these devices, you first download the LoopPay app for Apple or Android phones, and charge them using the included USB cables. You then create an account and attach the included credit card reader to you phone. Finally, swipe your credit cards through the card reader, and add the security code and the issuer’s phone number for each card. Unfortunately, the app is unable to supply the card issuer’s phone number automatically (even though it could be determined by the first six digits of the credit card, which are the same on all cards of the same type). For example, even though every Starwood American Express begins with the numbers 371742, the LoopPay app doesn’t pull up the right phone number for American Express.
Once you’ve entered your cards, you can make purchases by tapping a button on the back of the card, or by selecting a stored credit card in the app, while the device is held beside the magnetic stripe reader of the credit card terminal.
Where it works
LoopPay claims to be the most accepted mobile wallet on the planet, and that its device will work with about 90% of card readers out there, which seems about right considering that it’s not compatible with ATM machines and other devices that require a card to be inserted or “dipped.” In addition, there may be some challenges in situations where you have to give your card to a cashier to be used, as that person is unlikely to be familiar with this technology. Let’s just say that I’m not eager to conclude a nice dinner out by teaching a lesson in technology to an incredulous server.
To help address this issue, the CardCase’s device detaches and can be given to a waiter or cashier, so you don’t have to hand over your phone itself. It even includes some basic instructions that might help a patient cashier figure it out. Thankfully, the CardCase includes room to store a backup credit card and a driver’s license.
Comparing mobile wallet solutions
So how does LoopPay stack up to the competition? I looked at compatibility, price, and availability for several mobile payment options to see.
- Device compatibility: The CardCase device is compatible with the iPhone 5 and 5s, and other devices are offered that are compatible with any Apple or Android phone.
- Credit card compatibility: It should be compatible with credit, debit, or gift cards. In practice, I was unable to sync some of my gift cards.
- Merchant compatibility: 90%, but that doesn’t include times when a cashier is unwilling or unable to use the device. Not compatible with EMV chip readers at this time.
- Price: $29.95 for the Fob, $59.95 for the CardCase, and $89.95 for the ChargeCase.
- Availability: LoopPay is currently available.
- Device compatibility: Apple Pay is compatible with a single phone, the iPhone 6.
- Credit card compatibility: It is currently compatible with many major and minor credit card issuers, although there are some significant gaps. For example, it’s not compatible with small business credit cards from Chase or Citi, as well as the Discover card.
- Merchant compatibility: It works at about 3% of retailers (those that have the NFC compatible terminals and participate in Apple Pay).
- Price: The iPhone 6 starts at $199.99.
- Availability: Apple Pay is currently available.
- Device compatibility: Coin is compatible with iOS devices that have Bluetooth 4.0 hardware and that are running iOS 7.0 or later, and Android devices that have Bluetooth 4.0 hardware and that are running Android 4.3 or later.
- Credit card compatibility: Coin works with just about everything: your debit cards, credit cards, gift cards, loyalty cards and membership cards. Not compatible with EMV chip readers at this time.
- Merchant compatibility: Any merchant that uses a magnetic stripe reader. Not compatible with EMV chip readers at this time.
- Price: $100 plus taxes and shipping.
- Availability: Currently taking pre-orders for their beta with no shipping date.
- Device compatibility: Any smartphone.
- Credit card compatibility: Plastc works with your debit cards, credit cards, gift cards, loyalty cards and membership cards.
- Merchant compatibility: Uses NFC, a rewritable magnetic stripe and an EMV chip for near 100% compatibility.
- Price: $155
- Availability: Currently taking pre-orders with a shipping date of Summer 2015.
The Platinum Card® from American Express
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