Boston-based Loop has released its LoopWallet app for storing magnetic-stripe cards on smartphones and using them in contactless payments at regular POS terminals, according to a company announcement.

Mag-stripe cards for payment, gift, loyalty, ID or membership are read by the Loop Fob, a small audio jack magnetic-stripe reader, and then card data is encrypted and stored on the user's smartphone. The LoopWallet app allows users to view their cards and select the one they wish to use.

To make a payment at the point of sale, the phone sends a signal, using Loop's Magnetic Secure Transmission technology. MST emulates the signal generated when a mag-stripe card is swiped across a POS terminal's read head. The signal is received by any mag-stripe card reader without requiring modifications to the POS terminal or processing system, the company said.

Loop, which is incorporated as LoopPay Inc., is a Level One PCI certified payment provider. Its technology has applications for turning loyalty cards into contactless cards and can also be used to generate dynamic card data every time a payment is made, preventing the creation of cloned cards.

The Loop Fob contains a microprocessor and magnetic induction loop and can be used without a phone, in which case payment would be taken from a designated card.

The free LoopWallet App for iOS 7 is available in the Apple App Store, with an Android version planned for release in April 2014. The app is only available to U.S. consumers.

Separately, Loop also announced it was oversubscribed in its recent Series A funding round, which raised $12 million.