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Google Pads Wallet With SoftCard Tech & IP

Softcard, the mobile operator joint venture formerly known as Isis, will soon be referred to only as Google Wallet. The Android maker is acquiring the company's technology and IP to improve its Google Wallet service, which will preload on all of AT&T, Verizon and T-Mobile's Android smartphones later this year.

Google (Nasdaq: GOOG) announced the deal -- terms for which were undisclosed -- on Monday afternoon, noting in a blog post it is "acquiring some exciting technology and intellectual property from Softcard to make Google Wallet better." Google Wallet will now come pre-loaded on Android smartphones from AT&T Inc. (NYSE: T), Verizon Wireless and T-Mobile US Inc. running the KitKat operating system or higher.

"From tap and pay to storing loyalty and gift cards to sending money to friends, we've been working hard to make the Google Wallet app even more useful to you -- and there's lots more to come," the blog post reads.

Softcard was first launched in 2010 under the name Isis as a joint venture between the three operators, and financial institutions and credit card companies, using near-field communications (NFC) for short-range contactless payments on the smartphone. Interestingly, Sprint Corp. (NYSE: S) declined to join the group, opting instead to strike a deal with Google (Nasdaq: GOOG) to preload its Wallet on Android devices. (See US Carriers Combine Mobile Wallets, Why Sprint Doesn't Put Money on Isis and Google Taps Sprint for Tap-to-Pay.)

The joint venture has had trouble gaining traction the past five years with several delayed launches, changes in business model, limited merchant and customer participation, layoffs and, of course, the need to change its name in September as it got confused with the terrorist group Isis. (See Isis (the Mobile Wallet One) to Rebrand, Isis Changes Name to Softcard and Mobile Money: What's the End Game?)

Softcard says current Softcard customers can continue to use the tap-to-pay app and that more information is coming for customers and partners in the coming weeks.

For more on mobile payments, peruse our mobile apps and services channel.

The acquisition is an interesting one for Google as well. It comes just a few days after Samsung Corp. acquired contactless technology developer LoopPay. The handset maker is expected to unveil its own mobile payments service at next week's Mobile World Congress show. It will face competition from its Android supplier, and both will be taking on Apple Inc. (Nasdaq: AAPL), which recently introduced its own Apple Pay service, as well as others like PayPal keen to own the burgeoning mobile payments space. (See Samsung Buys LoopPay to Take on Apple Pay and Apple's New iPads: Built for the Enterprise.)

— Sarah Thomas, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, Editorial Operations Director, Light Reading

MordyK 2/24/2015 | 12:09:19 PM
Re: SoftCard It actually amazes me that Google and the banks couldn't come to an agreement on the data. Fact is card linked offers are how banks monetize the transaction data, but those have all failed terribly. However if Google changed its attitude it is well suited to monetizing the data with AdSense which enables theoretical sharing the revenue generated from the transaction data back to the bank, so the only real question is who "owns" the data although it doesn't really make a difference.

If Google were to not only forego on the 15-25 basis points paid by the issuer and actally offered money back, I think banks would be extremely welcomeing.
Phil_Britt 2/24/2015 | 11:53:34 AM
Re: SoftCard Google won't forego the data, and it needs to make a compelling interchange agreement. Apple is getting about 15 basis points per transaction. So if Google can undercut Apple, it will have a deal. But the battle over who owns the data will continue for some time.
MordyK 2/24/2015 | 11:47:53 AM
Re: SoftCard The crux of the problem is that Google wants the transaction data for which it was ready to swallow the costs of downgrading from card-present to card-not-present rates, which is why it had such difficulty with bank adoption which feel they own the data. Softcard doesn't change the dynamic, as it is more like ApplePay in that it only serves the card without gathering data. 

Unless Google either figures out a way to collect the transaction data or forgoes on the data (for now) for the sake of Wallet's success, I fear they'll be stuck in the same situation in another 3 years.
Phil_Britt 2/24/2015 | 7:42:40 AM
Re: SoftCard Google Wallet has had several issues since its debut more than three years ago. ApplePay is the rising tide that will raise all mobile wallet boats, but it might be the type of tide that will capsize others. One of the biggest things in Apple's favor is that it's a marketing machine -- only a miniscule number of merchants accept it, but you would never know from all the press it receives. Google wallet to date has been a failure and will likely remain behind ApplePay and "Sumsung Pay" whenever the later debuts. However, if Google could add a partnership with MCX, it could be in a much stronger position.
sarahthomas1011 2/23/2015 | 5:49:20 PM
Re: SoftCard That is a really good point! They went around in circles about blocking Google Wallet for so long. I guess they feel it's secure enough now? Sprint is looking like the smartest operator for abstaining now. It should benefit from the integration too. It's sad for the Softcard employees and those involved, but there were so many missteps from day one...
KBode 2/23/2015 | 5:00:35 PM
SoftCard Ironic, after these companies blocked Google Wallet for years. And while the companies claimed it was due to relatively ambiguous technical and security issues, many say it was done to give Isis a leg up in the market. Apparently that went well. Interesting that the blog post by SoftCard tries so very well to avoid acknowledging the whole thing was a failure...
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