Samsung Electronics has confirmed that anyone using its mobile payments service, the recently launched Samsung Pay, has no cause for concern following the news of a data breach on subsidiary LoopPay's network. Sensitive data unique to each user was not compromised in the attack.
Samsung Pay was introduced in the United States only two weeks ago. Given the technology's relatively short period of active use, it may naturally concern users and potential converts. Samsung was quick in its attempt to control any possible damage to its mobile payments service's reputation, saying, "The LoopPay corporate network issue was resolved immediately and had nothing to do with Samsung Pay." Its statements are true of course, as the data breach was limited to LoopPay's office network, not Samsung's server where user information is stored. That data is guarded by Samsung Pay's mobile division, which is not connected in any physical way to the three LoopPay corporate servers hackers gained access to.
Nonetheless, analyst Lee Jae-yun, speaking on behalf of Yuanta Securities, said news of the data breach so soon after the launch of Samsung Pay could still negatively affect the mobile payments service. At this point in the life of Samsung Pay, the service is still seeking out early adopters to form its base audience. LoopPay's breach may not be a reason for concern, but potential users may see its connection to Samsung Pay and choose to not participate. The end result would be a slower than anticipated take-off for the fledgling service.
As reported yesterday, Samsung's freshly acquired subsidiary LoopPay was hacked in March, but it went unnoticed until August. The attacks were Chinese-based, and it is believed the hackers were attempting to steal information regarding the innovative technology that powers Samsung Pay. Called MST, short for magnetic secure transmission, what was originally LoopPay's technology allows already standard card readers to accept Samsung Pay. MST is not found in Android Pay or Apple Pay, giving Samsung a clear edge in mobile payments until NFC, used by all three competitors, is accepted at a comparable amount of retailers. However, the servers compromised during the attack not only did not store user data but mentioned nothing of LoopPay's prized MST technology.