Google is girding its loins for an all-out mobile payments war with Apple and others, and its next move appears to be acquiring current competitor Softcard. The move would help Google fend off Apple’s growing mobile payments market share, while allowing it to overcome some competition and hurdles it currently faces.
Softcard (formerly and unfortunately named Isis), the mobile payments company jointly owned by AT&T, Verizon Wireless and T-Mobile USA, laid off more than 60 employees last week and told its remaining employees to cease working until a buyer was found, according to The Wall Street Journal.
That buyer appears to be Google, which recently offered to purchase Softcard for $50 million. PayPal expressed interest in buying Softcard, but the telecom companies behind Softcard prefer Google because they all sell phones that run Google’s Android mobile operating system. Google also has a revenue-sharing model related to mobile searches and its Play store in place with the companies behind Softcard.
Acquiring Softcard would remove a thorn in Google’s side, as its Wallet mobile payment service has suffered partly because of telecom companies’ unwillingness to help. Instead, they decided to launch their own mobile payments solution in Softcard, which has also struggled to gain sure footing.
The acquisition would also reopen previously derailed discussions between Google and the telecom companies regarding the use of data on mobile purchase behavior in physical stores to improve digital advertising targeting and the sharing of this ad revenue.
Google also appears to be interested in Softcard’s more than 120 patents and applications for patents, according to TechCrunch.
“It’s unfortunate that they’ve chosen now as a time to scale back,” according to Ed Busby, Softcard’s former chief commerce officer, who spoke with TechCrunch about the potential deal. “Externally, for the first time since I’ve been in this industry, the signs are pointing positively for mobile payments.”