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Okay, maybe it’s not as awesome as NASA’s new 6’2″ superhero robot, but right now it’s a heck of a lot more relevant to everyday life. Loop, a Boston-based startup, has developed an iPhone case that allows users to transmit credit card information with their mobile device. It’s pretty exciting.
What makes Loop special?
Similar NFC systems have already been developed, but Loop is exciting because it works with most existing payment terminals. If you had a Loop case in your possession, you could literally walk out your door right now and use it at just about any store that accepts credit cards. You don’t need to wait around for merchants to upgrade their technology. The infrastructure is already in place.
So how does it work? The Loop iPhone case comes with a small card reader, called a “fob,” which plugs into the headphone jack and is similar to Square’s attachment. After installing the Loop app, you can load credit cards onto your phone by swiping them through the fob. Once you’ve saved your information, you’re ready to shop.
Currently, American credit card terminals receive information by reading the magnetic stripe on the back of each card. The old magstripe system may change in the coming years as smart chips become the universal standard, but for now, magnetic stripes still predominate in the States.
Loop developed its new case to be compatible with magstripe readers, meaning the technology is already effective. Instead of swiping a card, you simply hold your phone up to the payment terminal and press a few buttons on your screen. The Loop case will transmit a magnetic signal that mimics the functionality of a magstripe. It’s able to communicate with most existing American credit card terminals.
Features and security
One of the primary goals of Loop’s new invention is to eliminate the need for a wallet crammed full of plastic. Obviously, credit cards aren’t the only item taking up real estate in most wallets. With Loop, you can also load information from debit cards, store rewards cards, gift cards, membership cards and even ID cards. While you might not be able to get rid of your wallet entirely just yet, you can at least lighten the load.
Pretty cool, right? At this point, you probably have some concerns about security. You’re putting very sensitive information onto your phone, and it could be devastating if that data fell into the wrong hands. Loop does not take security lightly. There are a number of safeguards to protect users from theft. For starters, the device can be set up to automatically lock after a specified period of time. To reopen, you have to enter your PIN and password. Loop requires private personal information during the sign-in process, and thieves can’t link your card to their own account.
Loop’s biggest shortcoming is perhaps its limited compatibility with various phones. The case will only fit an iPhone 5 or 5s. Older iPhones and Androids can still use the technology, but they have to use the fob attachment instead of a convenient carrying case. The fob contains its own transmitter, allowing it to transfer magnetic data the same way the case does. That makes it slightly cumbersome for anyone without the proper device.
Is Loop the future of point-of-sale transactions? Or just another stepping stone on the path to something better? Only time will tell. For now, there’s nothing wrong with getting ahead of the curve and impressing your tech-geek pals.