Authentication & Security

Exclusive Interview with Will Graylin and Damien Balsan at LOOP offices, MST works magic with Existing POS and is the Talk of The Town

MEDICIFounder and Chief Strategy & Innovation Officer

This is the kind of technology that Steve Jobs would have liked to introduce to the world. He would have said "This changes everything in proximity payments". I have talked about the Mobile Wallets analysis that we have been doing and Loop wallet was under our radar for a while. So we made a half day trip to Woburn in Boston to find out whats going on at this startup. For a change, LoopPay (simply called Loop as well) is not a startup of college kids but experienced boys who are bringing contactless, friction-less payments to 90% or more of existing POS. Its is a team that has founders of immensely successful payment companies like Hypercom, ROAM data, Way systems and also people who ran large programs for Paypal and Nokia NFC.

Loop just works and helps Read, Store and Transmit payments. Seasoned payment boys brought this revolutionary Magnetic Secure Transaction (MST) technology and merchants are liking it a lot. MST technology generates changing magnetic fields over a very short period of time. This is accomplished by putting alternating current through an inductive loop, which can then be received by the magnetic read head of the credit card reader. The signal received from Loop emulates the same magnetic field change as a mag stripe card when swiped across the same read head.

IMG_8884 In the Pic: Will is at the center with Lets Talk Payments card and Damien on the extreme right with Loop  Chargecase 

Reviews from actual usage - I had a Fob to myself since last week and used it at merchants across 3 states in the US. - The cashier at Starbucks in NYC said "Oh I can see swipe getting replaced by a button push - Beep Beep all the way" - The girl behind the POS at MacDonalds in New Jersey couldn’t believe her eyes. I used the fob at their consumer facing POS device. - And here is a video of an impromptu payment being done at a boutique Steakhouse in Woburn, Boston. The restaurant managers and serving staff said “This is the coolest thing I have seen in a while” and “I am getting one of these definitely”. Watch the Video - Raw Impromptu video of a live transaction done at a Steakhouse in Woburn, Boston from Lets Talk Payments on Vimeo.

Commercial Launch of the App and Fob - Loop had announced a contactless mobile payment technology last year that uses the ubiquitous magstripe reader to deliver secure transactions. Merchants do not have to change their equipment, nor do they need to invest in new software to support it. You can go ahead and download the free LoopWallet App NOW on the Apple App Store. And you can order the Fob NOW or pre-order a ChargeCase, one of which is required to make this whole thing work. Here is the link to do that.

Loop has got some amazing traction so far in over an year of operations. Founders of the company had put up the project on kickstarter and by Nov 7 last year they went past beyond their target with 1,476 backers and $123,788 pledged of $100,000 goal. They got a $12 million investments so far from founders and other private investments. And are looking to raise another round of investments.

< Star Team - What happens when some of the best names in the industry come together and create the best startup team I know of (credentials basis). A person who created early days Magstripe/POS tech (George), NFC and POS business expert and veteran (Damien), and an inventor, international payment entrepreneur who has built and sold payment and tech companies (Will).

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Will Graylin did some amazing innovations in the filed of payments and has been a serial entrepreneur. Prior to founding Loop, he was founder and CEO of ROAM Data, a very successful mobile POS & mobile payment solutions provider, majority purchased by Ingenico. Prior to ROAM he started WAY Systems, the 1st pocket size mobile POS solutions provider, later purchased by VeriFone. ROAM and WAY has won numerous innovation awards in the payments industry

 

George Wallner has been in the payment industry for more than three decades. He was the founder of Hypercom earlier. He launched the first modern day mag stripe POS and POS Network equipment that supports the electronic payment industry today. George took Hypercom from zero to IPO and become the #1 or #2 POS provider worldwide for many years before his retirement, and its later acquisition by VeriFone. George along with Will invented the Magnetic Secure Transmission (MST) technology and has taken on his first operating role since Hypercom, to help make Loop a leader in mobile commerce. George is heading up technology innovation at Loop including MST development in peripherals and phones. He has numerous inventions in the field of POS, payment networks, and radio communications and is also a leading expert in radio antenna design.

Damien Balsan has been in the thick of things in the payments industry. He was the director of Ecosystem Partnerships (POS) at Paypal before co-founding Loop. Before Paypal, he was the Director and Head of NFC Business Development Americas. He has also worked for Way systems and Gemalto in the past.

Why Loop could succeed - Nobody needs another payment system that works on only a single island. Fragmentation in terms of technology, in terms of availability is pretty much the Achilles heels of payments. Some great startups have tried and built amazing solutions that work with limited merchants and a limited user base. For digital/mobile payments to really take off, something big and/or something universal was needed. Loop provides just that. There is great possibility that it will get really integrated into the phone (inside the circuitry or an external thin case) and so there won't be any need to carry anything else for mobile commerce.

Loop works within a 3-inch distance from the read head. The field dissipates rapidly beyond that point, and only exists during a transmission initiated by the user. The payments I made were quick and effortless and didn't require any change in merchant behavior or terminal at all. The consumer side innovation is easier and cheaper to implement. So this new way of driving innovation through the consumer (buyer end) instead of merchant (seller end) is a smart move. Loop fob makes sure you are not paying for any transactions happening at a nearby POS if you accidentally press the button because of the short range. Some people call it the new NFC minus the costs.  If you don't have to ask merchants to really change their habits or POS terminals thats a huge win right there. </p>
 

Security - I was looking to understand the security aspect being covered by Loop in a tad more detail. So I went through George Wallner's white paper on their patented technology called Magnetic Secure Transmission. A key feature of Loop's technology is that it adds substantial security to transactions. The security is based on tokenization, which makes part of the card data seemingly random and unusable to anyone else but the intended recipient. Stolen tokenized card data is useless for creating working counterfeit cards or transactions. Known as Partial Tokenization, it creates a new cryptographically generated token for each transaction. Since the key needed to create a valid token is not known, a counterfeiter is unable to create tokens for fraudulent cards or transactions. When loaded into the Loop Mobile Wallet, any existing magnetic stripe card can become enabled for secure tokenized transactions, provided the card issuer supports Partial Tokenization. Because retailers do not need to upgrade their systems to support Loop, they can immediately benefit from its security features. The industry is moving toward EMV, which will provide substantial security for cards. It will take, however, several years to build the necessary infrastructure. Loop is able to provide that kind of security now and would be able to support EMV.

Next Frontier - I don't see why Loop would even stop the innovation at the current solution set. Infact I think they would be working towards the next generations of lighter Fobs, and Thinner ChargeCases and in essence trying to reduce the size, weight of the Appcessories (as they call it) and minitiarze them. With this kind of revolutionary tech being patented, lot of players (telecom, mobile devices, retailers?) would like to partner with them. - Imagine a device maker putting the loop inside the phones at OEM level itself, possibilities? - Imagine a carrier (operator) running an entire payments program using Loop technology, possibilities?

For domestic growth Loop will work with various channels including but not limited to, reaching out to students. They have tied up with Campus Nation Network. “LoopWallet fully compliments Campus Nation Network’s strategy to fully serve the university and college markets with smartphone transaction coupons, special offers & capabilities, college-specific information, and other services,” stated Thomas Kuehle, CNN’s President. They also have international growth plans including but not limited to Australia, China and some other countries from Asia.

Amit Goel

MEDICIFounder and Chief Strategy & Innovation Officer

“Amit Goel is the Founder & Chief Strategy & Innovation Officer for MEDICI. Amit’s vision is to build a strong FinTech market network that involves financial institutions, banks, startups, investors, analysts & other key stakeholders across the ecosystem – helping each one of them in a meaningful way by removing the asymmetry of information and providing a platform to engage & transact.\ \ Amit is passionate about bringing actionable FinTech-focused insights, innovative products & services for the FinTech ecosystem. Some of his work involves startup scores, bank scores/assessments, predictive viewpoints & other innovations that have helped MEDICI’s customers and the ecosystem. He has been named amongst the Top 100 FinTech thought leaders/influencers in the world & Top 10 in Asia multiple times by reputed agencies, consulting firms as well as financial institutions. Amit has built MEDICI (formerly LTP) as a new-age, tech-enabled advisory/research firm, which is now considered the #1 global research & innovation platform for FinTech in the world.\ \ Amit has been writing pioneering viewpoints on financial technology space that have been ahead of the curve since 2010. His data-driven predictions have helped the customers as well as the ecosystem. His past work experience includes a strong background in strategy & market analysis and advisory to clients (from big business houses to Fortune 500 firms) in payments, commerce, financial services & IT/technology. In the past, Amit had also founded a successful consulting & research practice called GrowthPraxis and has worked at Boston Analytics, Frost & Sullivan, and Daimler Chrysler in strategy & research.”