Someday we might pay for everything with our phones. That "wallet-phone" concept has been flying around for years, and there are already a number of options in the wild, using NFC, special cards, or QR codes to pay. The Loop ChargeCase from LoopPay, available today, offers an alternative idea: make a technology that works with any credit card reader, anywhere. Seriously, it works, but it might freak you, or the place where you're buying things, out.
LoopPay uses a technology that works with regular magnetic credit card readers, duplicating the effect of a card being run through, but transmitting it via a magnetic loop inside the device: LoopPay calls it Magnetic Secure Transmission (MST). It works at any credit card terminal that uses a standard swipe, sending out a code that matches what a credit card reader would receive when a card is run through it. Hold the Loop fob close enough to a credit card swipe-slot, and it magically works.
LoopPay launched this past winter in the form of a little fob-sized plug-in device, called the LoopPay Fob: it pops into your Android or iPhone headphone jack like a Square card-reader, scans credit cards into a LoopWallet app that stores the information, then effectively use those cards to pay at stores. It costs only $39, which directly converts to about £20/AU$40. The new ChargeCase costs more at $99 (£60/AU$100), but it also doubles as a full iPhone 5 or 5S case, and can recharge up to 60 percent of its battery.
The Loop ChargeCase looks like...well, a generic iPhone case: thick, white, and a little clunky. Besides giving your iPhone 5 or 5s a little battery boost via a Lightining pop-out dongle, the case has that same embedded magnetic induction loop that does the payment magic. The case also feels slightly flimsy: the white snap-on plastic shell on my prerelease unit didn't fit easily and was really hard to unsnap again once it was fastened. And the charging capacity didn't seem to give my iPhone 5s more than a slight top-off.
Add an extra LoopPay Fob, which comes included for now in the purchase, and you can scan your credit cards in. Once that's done, you can set one card as the default payment, which will ping out when you press a small button on the side of the Loop ChargeCase. Or, you can use the LoopWallet app to pick your stored card and send a payment. The case only sends its little magnetic ping once you've told it to.
Does storing credit card data on a case and separate app make you nervous? Of course it should. But Loop has taken efforts to add a lot of security: the case and fob bond to a single iPhone and account. That account gets bonded to your particular phone number, and a proper address check is run to verify identity. The app also has a PIN number that has to be entered every time it opens, even when it's running in the background. The case and fob can both hold a single credit card's information and be used to make one-button payments without the phone, but you can set the accessories to never do this, or automatically cut off after 10 minutes or eight hours. Credit card information is stored locally on the hardware and encrypted.
Also, you can't scan other people's cards into the LoopWallet: I tried, and it told me they weren't mine. And, if someone else tries to add their own case to your phone and duplicate your existing card data, it won't let you: you'll have to rescan the cards again.
The LoopWallet app doesn't just hold credit cards: in fact, it can store any magnetic-strip card, including debit cards, gift cards, and customer-loyalty cards.
The best thing I can say about Loop is it really works: I bought things at little bodegas, vending machines, restaurants, taxis, and wherever else I could find, and it rarely failed. But, you have to hold the case right up to the credit-card slot. Many stores have their credit-card swipers tucked away, which meant I had to awkwardly ask them to hold my phone or fob up to their register, or try to lean over and do it myself. That's the acceptance-factor challenge of Fob: that, and many stores doing big-ticket transactions still require proper credit cards and ID. I got a few weird and not-too-friendly looks at a few places. Others smiled and thought it was magical.
As Google, Square, PayPal, and many others keep aiming to crack mobile payments, LoopPay shows an interesting and universal alternative. For people traveling or those who just want a simple way to pay anywhere, Loop could be the answer in the future. It's unclear what will happen to LoopPay when magnetic credit cards are phased out in favor of more secure payments: in the US, cards don't always need additional chips to secure transactions, which makes LoopPay successful as a stand-in. And, will vendors accept LoopPay, or will they still require you to show your card and ID? It's intriguing experimental tech with a somewhat clunky piece of physical hardware. I'm curious where LoopPay could go next: a credit card-like Coin, or maybe even a wristband. I'd just rather not carry a big case like this when I can just use, well, my credit card instead. For now though, it works: maybe, for some, that's enough.