Google snags Softcard’s technology
And the beat goes on for the mobile wallet market.
Just days after Samsung bought LoopPay as part of its push into mobile payments, Google said on February 23, 2015 it had reached an agreement with the mobile operators behind Softcard to acquire that wallet’s technology and other capabilities to eventually integrate into Google Wallet.
Google’s deal with AT&T, T-Mobile and Verizon solves the biggest problem the company faced with mobile payments: access. Those MNOs did not allow Google Wallet to be pre-loaded on its Android phones because of security concerns. Since then, however, Google established Host Card Emulation (HCE) as a way to circumvent the access it sought to the secure element on Android-powered phones. Google now has that access.
As part of this deal, Google Wallet now will be pre-installed on Android phones running the latest versions of the mobile operating system (KitKat and higher). Google Wallet not only gives users the ability to conduct tap-and-pay mobile payments, but also the option to store loyalty and gift cards and make person-to-person fund transfers.
“Over the years, we’ve received great feedback from people who use this feature (tap and pay) and we’ve continued investing to make it easy and secure for more people to pay with their phones,” Ariel Bardin, vice president of payments for Google, wrote on the Google Commerce blog. “A big part of this is working with other innovators in the industry to help provide a seamless experience across a wide range of phones and stores.”
Google saw more consumers use Google Wallet thanks to the frenzy Apple created with Apple Pay. When merchants upgraded their point-of-sale terminals with the necessary contactless technology to accept Apple Pay, Google Wallet benefited as well. Softcard did too, but that’s a moot point right now.
Softcard wrote in a blog post on 23 February that its users can continue to access and pay with the Softcard app, but it appears that at some point Softcard will cease to exist as its technology and capabilities transition to Google.
For Softcard, the sale to Google is the final nail in the coffin for a company that faced a number of challenges and setbacks in the last six months.
In January 2015, Softcard laid off 60 employees in a move meant to streamline its operations with a reduced budget. Many industry observers believed the layoffs were a precursor to a sale or outright closure. A couple of weeks later, rumors began to circulate in the mainstream media that Google was interested in purchasing Softcard.
Softcard rebranded in September 2014 to disassociate itself from any kind of perceived link with the extremist militant terrorist group that uses the acronym ISIS.
Softcard suffered its biggest blow when Apple Pay arrived, but the company tried to put a positive spin on it. CEO Michael Abbott even went as far as saying the company was working with Apple to get its mobile wallet included on future iPhones. Softcard intended to do this using what it called an integrated secure SIM-based hardware solution. That plan never materialized in the subsequent months after Abbott first announced it.
With Google’s acquisition of Softcard, the Android platform suddenly has some more choices when it comes to mobile wallets.
Samsung is expected to announce Samsung Pay when it reveals the new Galaxy smartphone March 1, 2015 at the Mobile World Congress in Spain. The company’s acquisition of LoopPay last week was a precursor to that announcement. LoopPay’s Magnetic Secure Transmission technology, which can “communicate” with magnetic-stripe terminals, is expected to be integrated into the new Galaxy. It’s unclear at this point how that technology will be paired with NFC (Near Field Communications), which has been a staple on Galaxy phones for quite some time.