Loop, the payments startup that allows for contactless payments at magstripe card readers using magnetic transmission, has plans that go far beyond magstripe itself. The company has deals in the works with Visa and a major handset manufacturer that should see daylight later this year, CEO Will Graylin told Bank Innovation yesterday. Loop is in talks with Visa to make every Loop-powered transaction a dynamic one, so that static magstripe cards will work like EMV cards and send a one-time token to the point of sale. Tokenization makes the data useless to those that might intercept it, and would have prevented, for example, the Target debacle, Graylin said. This enhanced security will figure in Loop’s marketing. “The POS doesn’t care, the acquirer doesn”t care,” Graylin said, describing Loop’s tokenization scenario. “The network connects to the issuer who sends a one-time token back. It’s the same security as EMV, and counts as a card-present transaction for the merchant.” Card-not-present transactions, which happen for example over the phone or internet, carry higher interchange fees for merchants because they carry a greater risk of fraud. Loop burst on the scene at Money2020 to widespread acclaim in the fall of 2013. Shortly afterward the company secured $10 […]
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