Google Wallet Is Now Poised To Compete with Apple Pay After Its Deal with Softcard
Google Wallet just got a little more firepower in the mobile payments war.
Today Google said that U.S. wireless carriers AT&T, Verizon Wireless and T-Mobile will pre-install its Google Wallet payments app on Android phones sold by the carriers this year. In addition to the distribution deal, Google also acquired technology and intellectual property from Softcard (formerly known as Isis Mobile Wallet), a joint venture from those same wireless carriers. Softcard has been offering its own mobile payments tool since 2012, and this technology will now be rolled into upcoming versions of Google Wallet.
The deal marks a surrender of sorts for Softcard in what had been a war of attrition with Google. The venture kicked off in 2010, but its actual tap-and-pay app didn’t appear for another two years because of problems with development. Meanwhile, Softcard faced competition from Google Wallet, the NFC-based app introduced by the internet giant in 2011. The Softcard carriers blocked Google’s app, and that hurt Google Wallet. But Softcard’s own effort didn’t make as big a splash in the mobile payments space as the company had hoped.
Last month, tech news site Re/code reported layoffs within the company that may have affected between 12 to 30 percent of the staff. Now, with Google Wallet folding Softcard’s technology into future products, the beleaguered company’s future is unclear.
“For now, Softcard customers can continue to tap and pay with the app,” a statement on its website reads. “We will share more information with customers and partners in the coming weeks.”
But with Softcard out of the running, and wireless carriers now doing the distribution legwork for Google, Wallet could have a real chance to compete with the tool that has dominated mobile payments thus far: Apple Pay. Since launching in October, Apple’s mobile payments system has partnered up with dozens of banks and retailers to let people quickly pay for stuff with their iPhones. During the company’s earnings call last month, Apple CEO Tim Cook said that the service now accounts more than $2 out of every $3 spent on purchases using contactless payments.
The mobile payments war isn’t new, by any means. For years, similar services have promised to reinvent in-store payments, including efforts from PayPal, the retail consortium MCX, and San Francisco startup Square. But in just the past few months, the space has gotten red-hot, with ever new entries are jumping into the fray. (The latest: mobile device maker Samsung, which scooped up payments startup LoopPay last week.) Now, Google’s acquisition of new tech and its new partnerships with carriers could mean Apple Pay is finally facing a worthy competitor.