October 8, 2015 / 1:41 AM / 4 years ago

Samsung Electronics says mobile payments data safe after LoopPay hack

A picture illustration shows Samsung's logo reflected in a person's eye, in central Bosnian town of Zenica, March 13, 2015. REUTERS/Dado Ruvic

SEOUL (Reuters) - Tech giant Samsung Electronics Co Ltd said its Samsung Pay user data is safe after a hacking attack against a U.S.-based subsidiary that developed a key technology for its newly-launched mobile payments system.

Disclosure of the attack, first reported by the New York Times on Wednesday, comes less than two weeks after Samsung Pay’s launch in the United States. The world’s top smartphone maker hopes the convenience provided by the payments system can help it defend shrinking market share and margins.

“The LoopPay corporate network issue was resolved immediately and had nothing to do with Samsung Pay,” Samsung said in a statement.

Chinese hackers gained access to LoopPay’s office network around March and the breach was discovered in August, Samsung said. LoopPay developed the technology enabling Samsung Pay to work with magnetic-stripe card readers prevalent at retail stores, seen as a key advantage over similar services from Apple Inc and Google Inc.

The South Korean firm said Samsung Pay was operated by its own mobile division and was on a physically separate network to LoopPay’s, giving the hackers no access to user data or other core information.

The three compromised LoopPay servers did not store sensitive information including technologies developed by the firm.

Yuanta Securities analyst Lee Jae-yun said the hack could nevertheless trigger security concerns and slow user adoption of Samsung Pay.

Reporting by Se Young Lee; Editing by Stephen Coates

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