Google to buy Softcard, take on Apple Pay in new agreement with U.S. carriers
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.
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.
Comments
I guess a rising tide really does lift all ships. it got the carriers off their butts with mobile payments.
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.
FTFY
Without tokenization, it's a Hail Mary pass into the bleachers.
Not that Wall Street analysts would notice.
I can see Android phones being stolen just for CC data on sim cards now.. ack
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.
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?
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?
I seem to remember an article this past weekend about a manufacturer of SIM cards being hacked or something, yes, safe indeed....
Never have I been happier to still be on a CDMA carrier.
SIM ENCRYPTION HACKED BY NSA
So Sammy phones will have both?
And users will get double charged /s
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
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.
And good luck with the fragmentation there, Android.
>> 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?
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.
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