Google to buy Softcard, take on Apple Pay in new agreement with U.S. carriers

Posted:
in iPhone edited March 2015
Search giant Google is reportedly doubling down on its mobile payments strategy, agreeing on a new deal with major U.S. wireless providers to pre-install the Google Wallet app on Android handsets while acquiring the technology behind Softcard from those same carriers.




Google was first linked to a Softcard acquisition last month, with a price tag then pegged at a deeply-discounted rate below $100 million. The Softcard purchase, as well as the new distribution agreement that will see Google Wallet installed on Android phones from AT&T, T-Mobile, and Verizon Wireless, was first reported by Re/code.

"Softcard has completed a deal with Google to bring together leading technologies to advance mobile wallets," Softcard said in a blog post announcing the agreement. "Google has acquired Softcard technology and capabilities to power the next generation of mobile payments."

"Under this relationship, the Google Wallet app, including the tap and pay functionality, will come pre-installed on Android phones (running KitKat or higher) sold by these carriers in the US later this year," Google said in its own statement. "We're also acquiring some exciting technology and intellectual property from Softcard to make Google Wallet better."

Softcard works via NFC technology, but does not sport the same tokenized backend infrastructure of Apple Pay. Instead, credit card data is stored on a user's SIM card and transmitted to a POS terminal for processing.

The Google deal marks the second major mobile payments acquisition in the last two weeks. Samsung acquired startup LoopPay last Wednesday to bolster its own rumored "Samsung Pay" offering.
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Comments

  • Reply 1 of 116
    "credit card data is stored on a user's SIM card" - yeah, that sounds safe /s
  • Reply 2 of 116
    gatorguygatorguy Posts: 22,826member
    At least Android phones should be able to go back to using the same general type of secure element as Apple does if they wish. The carriers are unlikely to continue blocking the chip as they did on the older Nexus phones.

    I guess a rising tide really does lift all ships. it got the carriers off their butts with mobile payments.
  • Reply 3 of 116
    >> Softcard works via NFC technology, but does not sport the same tokenized backend infrastructure of Apple Pay.

    This is incorrect. They both tokenize in essentially the same manner.

    >> Instead, credit card data is stored on a user's SIM card and transmitted to a POS terminal for processing.

    Again incorrect. They both transmit tokens to the POS.
  • Reply 4 of 116
    xixoxixo Posts: 430member
    "Google has acquired Softcard technology and capabilities to power the [I][B]previous[/B][/I] generation of mobile payments."

    FTFY

    Without tokenization, it's a Hail Mary pass into the bleachers.

    Not that Wall Street analysts would notice.
  • Reply 5 of 116

    I can see Android phones being stolen just for CC data on sim cards now.. ack

  • Reply 6 of 116
    credit card data is stored on a user's SIM card and transmitted to a POS terminal for processing.

    And that right there people, is why this new system will be still born on arrival.

    This just SCREAMS of desperation on the part of Google, because they got caught with their pants down when ?Pay was released, and has garnered so much positive attention and usage in such a short amount of time.
  • Reply 7 of 116
    jungmarkjungmark Posts: 6,800member
    So Sammy phones will have both?
  • Reply 8 of 116
    Samsung must be feeling pretty dumb right about now
  • Reply 9 of 116

    Since the telephone carriers are pre-installing Google Wallet on Android devices, does this mean Android manufacturers just got forced to promote another Google service without getting a cut of the advertising money Google and the telephone carriers will be earning from the use of Google Wallet?

     

    And, with Samsung soon to be promoting LoopPay on the next Galaxy device, does this mean Samsung's mobile payments service just got neutered before it even got started? Can the telephone carriers block LoopPay?

  • Reply 10 of 116
    svguy wrote: »
    >> Softcard works via NFC technology, but does not sport the same tokenized backend infrastructure of Apple Pay.

    This is incorrect. They both tokenize in essentially the same manner.

    >> Instead, credit card data is stored on a user's SIM card and transmitted to a POS terminal for processing.

    Again incorrect. They both transmit tokens to the POS.

    If they are using a token how do the financial institutions know these tokens are associated with that person if there is no mention of Google working with the financial institutions to have these representational card numbers and tokens associated with a persons account?
  • Reply 11 of 116
    "credit card data is stored on a user's SIM card" - yeah, that sounds safe /s

    I seem to remember an article this past weekend about a manufacturer of SIM cards being hacked or something, yes, safe indeed....
  • Reply 12 of 116
    I thought google wallet was just as good as Apple Pay, if not better since it was first? Why do they need to make changes if it's as good as Apple Pay?
  • Reply 13 of 116
    Originally Posted by telliott5 View Post

    "credit card data is stored on a user's SIM card" - yeah, that sounds safe /s



    Never have I been happier to still be on a CDMA carrier.

     

    SIM ENCRYPTION HACKED BY NSA

  • Reply 14 of 116
    Quote:

    Originally Posted by jungmark View Post



    So Sammy phones will have both?

     

    And users will get double charged =)  /s

  • Reply 15 of 116

    Never have I been happier to still be on a CDMA carrier.

    SIM ENCRYPTION HACKED BY NSA

    CDMA is dying though, and 4GLTE still uses SIM cards.

    Google should know better than to try to compete with Apple here. They're such a scummy company that no one* will legitimately trust with credit card data.

    *with a functioning brain
  • Reply 16 of 116
    gatorguygatorguy Posts: 22,826member
    magman1979 wrote: »
    And that right there people, is why this new system will be still born on arrival.

    This just SCREAMS of desperation on the part of Google, because they got caught with their pants down when ?Pay was released, and has garnered so much positive attention and usage in such a short amount of time.
    Google offered a secure element integrated with the NFC chip a'la ApplePay several years ago. The carriers blocked it since they were planning their own mobile pay solution. In essence the carriers took away Google's first choice for mobile payment security. As I read about it Google spent a couple of years working to bypass the block. So along comes ApplePay breaking the blockade. Kudos.

    So it's not so much Google being caught with their pants down as carrier greed interfering. With the carriers unlikely to continue blocking the NFC-embedded secure element I'll be surprised if Google doesn't go back to it, but who knows but Google. They sometimes do odd stuff.
  • Reply 17 of 116
    Another kludgey attempt to compete with Apple's true, modern technology.
    And good luck with the fragmentation there, Android.
  • Reply 18 of 116
    fallenjtfallenjt Posts: 4,018member
    Quote:

    Originally Posted by SVGuy View Post



    >> Softcard works via NFC technology, but does not sport the same tokenized backend infrastructure of Apple Pay.



    This is incorrect. They both tokenize in essentially the same manner.



    >> Instead, credit card data is stored on a user's SIM card and transmitted to a POS terminal for processing.



    Again incorrect. They both transmit tokens to the POS.

    Reference to those, Mr. One Post?

  • Reply 19 of 116
    cpsrocpsro Posts: 2,782member
    Quote:

    Originally Posted by Gatorguy View Post



    I guess a rising tide really does lift all ships. it got the carriers off their butts with mobile payments.

    Clarification: With its well-designed and executed Apple Pay system, Apple got the carriers, hardware manufacturers, and Google off their butts with mobile payments.

     

    I think it marvelous that Apple released Apple Pay from out of the blue, after enduring critics and competitors slamming the company for not including NFC. Little did the competition know they were being set up to be "checkmated", if only for a while.

  • Reply 20 of 116
    gatorguygatorguy Posts: 22,826member
    fallenjt wrote: »
    Reference to those, Mr. One Post?
    Google absolutely uses tokanization, but not exactly the same way as ApplePay. IMHO Apple's is by far the better way but from strictly a payment security standpoint they both are darn secure. The big downside to Google Wallet right now is the cloud-based tokanization requires a cell signal, problematic in some stores. That needs to change.

    Here's a thumbnail description I found on ApplePay, Google Wallet and Softcard.
    http://www.creditcards.com/credit-card-news/apple-pay-google-wallet-softcard-mobile-wallet-review-1457.php
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