Google Wallet Buys Softcard Tech/IP, Signs Distribution Deal with Wireless Carriers (Feb. 25, 2015)
Google Wallet is getting fresh horses in the mobile wallet race, where Apple Pay has the early lead. Google Inc. on Monday announced it’s working with AT&T, T-Mobile USA and Verizon to ensure Google Wallet will come pre-installed in new Android phones beginning later this year, providing an important growth ramp for the 4-year-old NFC mobile payments concept. The search giant also confirmed something that’s been in the air for the last several weeks: Google Wallet is absorbing the three wireless carriers’ wallet service Softcard, turning a former rival into an ally. “We’re acquiring some exciting technology and intellectual property from Softcard to make Google Wallet better,” Ariel Bardin, Google’s vice president of payments, wrote in a blog post.
The NFC-based Google Wallet launched in 2011, but the concept failed to achieve broad consumer adoption, in part because the major wireless carriers blocked support for Google Wallet on Android handsets in favor of their own NFC wallet, Softcard. Beginning as a two-city pilot in 2010, Softcard finally rolled out nationally in 2013, but it struggled to get off the ground. In January Softcard laid off 60 employees and Google emerged as a likely suitor. Google Wallet reportedly will unveil a revamped version of its service in May, incorporating certain Softcard features.
The timing of Google’s move with Softcard is good, observers say, as consumer awareness of mobile payments is beginning to grow, following Apple Pay’s splashy rollout in October. Apple is readying a smartwatch, due in April, that’s expected to support Apple Pay. And, Samsung last week bought mobile startup LoopPay to enable a form of non-NFC contactless mobile payments with Android handsets at any POS terminal, using a LoopPay key fob or card case, sold separately.
“Google’s Softcard acquisition is the next logical step in the rationalization of the mobile wallet space,” Lee Manfred, a partner with First Annapolis Consulting, tells Paybefore. Google’s agreements with the wireless carriers probably are more significant than the Softcard assets the company acquired, he suggests. “The Google deal with the mobile network operators and the Samsung-LoopPay combinations set the stage for formidable Android-based challengers to Apple Pay,” Manfred notes, adding it’s still very early in the mobile payments race.
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