No payment system is safe from hackers these days, as all of these services are high-profile targets for people with less than honourable intentions. However, though there is a positive side to hacking, as well – in terms of finding and patching vulnerabilities – but the recent LoopPay breach is particularly worrying for anyone who has ever used Samsung Pay.
LoopPay Vulnerability Exploited By Chinese Hackers
For those who are unaware of what LoopPay is or does, this company’s technology is what enables Samsung users to pay for goods and services through Samsung Pay. This breach, as reported by the New York Times, took place in March of 2015, before this technology was even linked to Samsung Pay.
LoopPay is a subsidiary of Samsung and based in Massachusetts, USA. In March of 2015, LoopPay servers were breached by a group of hackers – called the Codoso Group or Sunshock Group – who apparently have close relations with Chinese government officials. Keeping mind that Samsung is a South Korean giant in the world of electronics, an attack by hackers affiliated with the Chinese government doesn’t seem outside of the realm of possibilities.
Samsung acquired LoopPay in February of 2015 for the price of US$250m and had major plans to integrate this company’s technology into their mobile payment system, now known as Samsung Pay. In particular, LoopPay’s magnetic secure transmission technology was of greatest interest to Samsung, and to these Chinese hackers as well.
Embracing LoopPay’s technology gives Samsung a major leg up over their competitors, such as Apple Pay and Google’s soon-to-be-released mobile payment solution. All of these mobile payment options use near-field communication [NFC] to communicate with the payment terminal for an in-store transaction.
But Samsung pay does something extra, as it is – for now – the only mobile payment option that is backwards compatible with older payment terminals. LoopPay’s magnetic secure transmissions technology allows Samsung Pay to emulate a commonly used magnetic stripe card and still process the transaction as if it was executed through a more modern payment terminal.
Such a valuable technology drew unwanted attention from all corners of the world, and a breach of LoopPay’s corporate network ensued in March of this year. At the time of publication, an internal investigation was still going on, but it appears as if Samsung’s payment system has not been affected. Furthermore, no consumer data has been exposed, according to the first reports.
It seems odd that the news about this breach was only recently revealed, but LoopPay only learned about this attack in late August of this year. Regardless of this breach, Samsung and LoopPay executives felt no need to delay the launch of Samsung Pay, which debuted in the United States as of last week.
“Samsung Pay was not impacted and at no point was any personal payment information at risk. This was an isolated incident that targeted the LoopPay corporate network, which is a physically separate network. The LoopPay corporate network issue was resolved immediately and had nothing to do with Samsung Pay.” – Samsung’s Chief Privacy Officer Darlene Cedres stated.
Bitcoin Payments Far More Secure And Mobile-Friendly
Despite its innovative technology, LoopPay’s breach just proves once again that centralized services and systems are a major point of weakness in the world of technology. Imagine if this breach had taken place when Samsung Pay was available worldwide, and all of a sudden their central payment technology company is hacked. Regardless of whether user data is breached, this created an insecure payment environment, and it remains to be seen whether or not the breach has been fully solved or not.
Bitcoin payments, on the other hand, are far more secure than any other mobile payment method in existence today. The major difference between Bitcoin and products like Samsung pay and Apple Pay is that Bitcoin does not rely on existing financial infrastructure to process payments. There are no credit cards, bank accounts, or even personal information attached to digital currency payments.
Furthermore, Bitcoin payments are powered by the blockchain, a decentralized ledger powered by many thousands of computers and devices all over the world. There is no central point of failure; there is no payment network to hack or breach. Bitcoin is a superior payment solution, and it has been available to mobile users around the world for many years now.
Source: New York Times
Images courtesy of LoopPay, Samsung Pay, Shutterstock