Google, Softcard Mobile Payment Partnership Targets Apple Pay - InformationWeek

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2/23/2015
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Google, Softcard Mobile Payment Partnership Targets Apple Pay

Google announces a collaboration with Softcard, heats up mobile payment battle with Apple and Samsung.

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Google has officially inked a deal with mobile payments solution provider Softcard and announced a collaboration with US wireless carriers Verizon, T-Mobile, and AT&T. It's a major step forward for the Internet giant, which is looking to compete with Apple and Samsung in the mobile payments arena.

As part of the deal, Google is acquiring technology and intellectual property from Softcard, which will likely be used to improve upon the current capabilities of the Google Wallet app. Consumers can use the app, which is similar to Apple Pay, to tap their phones to pay for purchases in select brick-and-mortar stores.

Softcard, originally founded as Isis, launched in 2013 as a joint venture from AT&T, Verizon, and T-Mobile to bring NFC-based mobile payments to US consumers. In addition to an unfortunate but necessary renaming process, the project struggled as a result of poor user experience and limited support for credit cards.

Hopefully Softcard's technology will fare better as part of Google's offerings. Starting later this year, Google reports, the Google Wallet app and tap-and-pay functionality will come pre-installed on Android phones running KitKat or higher from Verizon, T-Mobile, and AT&T.

[More Google projects to watch this year.]

Current Softcard users can continue to tap and pay through the app for the time being, the company reports, and more information on the evolution of its Google partnership will be available in coming months.

The news from Google and Softcard arrives amid a flurry of activity in the mobile payments space. Tech companies are scrambling to compete with Apple Pay, which is already available on the iPhone and has already started making waves. The app recently became available to consumers on certain JetBlue routes to pay for in-flight purchases.

Despite its influence, Apple could face major competition from Samsung, which most recently upped its strategy with the acquisition of mobile payment startup LoopPay. The company uses technology that doesn't require NFC to operate. This move could put Samsung ahead of Apple Pay, Google Wallet, and Softcard, all of which depend on NFC to process payments.

Background: NFC in the smartphone and payment terminal allows NFC radios to transmit information and complete payment transactions. It's effective, but also requires retailers to upgrade their in-store payment machines, which is pricey.

As far as the biggest tech companies are concerned, it's only a matter of time before smartphones replace cash and cards. Google's latest move will bring mobile payments to a larger audience, and pre-installing the app could influence more Android users to adopt mobile wallets.

The bigger question is, will mobile payments eventually replace traditional currency? Share your thoughts in the comments.

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Kelly Sheridan is the Staff Editor at Dark Reading, where she focuses on cybersecurity news and analysis. She is a business technology journalist who previously reported for InformationWeek, where she covered Microsoft, and Insurance & Technology, where she covered financial ... View Full Bio

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Kelly22
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Kelly22,
User Rank: Strategist
2/24/2015 | 12:04:50 PM
Re: edge
Absolutely, switching payment methods is a small price to pay for a discount on everyday products. Like you, I'm a loyal (almost too loyal) Dunkin' fan! I'd scan my iPhone for discounted coffee any day.
mak63
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mak63,
User Rank: Ninja
2/24/2015 | 11:20:56 AM
Re: edge
Good deals or even free stuff will certainly lure a customer to use the mobil payment method. You can count me in!
But the way, I love Dunkin' coffee.
Kelly22
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50%
Kelly22,
User Rank: Strategist
2/24/2015 | 9:37:22 AM
Re: If you can't beat them...
Ha, exactly. Seeing a similar strategy over at Microsoft in the way they're snapping up companies like Acompli and Sunrise to boost their mobile offerings.
Kelly22
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Kelly22,
User Rank: Strategist
2/24/2015 | 9:32:45 AM
Re: edge
Most of the time I'd agree with you - it's much easier to grab my debit card than to search through my phone for a specific app. But some retailers offer pretty good deals for people who pay with smartphones. I remember a couple months back, people who used Dunkin Donuts' mobile app for payment could order any size iced coffee for $.99. If some kind of incentive or rewards program was used for mobile payments, it could make a big difference in persuading people who don't normally pay with mobile (like me) to scan their phones at the register.
LeeB120
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LeeB120,
User Rank: Strategist
2/24/2015 | 9:16:55 AM
Re: edge
I have to agree. A lot of people still don't have smart phones and don't plan to get one.  I don't have any need for one and all I can see this doing it giving my bank info to one more company that can get hacked for someone to steal it.  Plus it's another charge on the bill.  I'll stick with cash or my debit card. 
mak63
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mak63,
User Rank: Ninja
2/24/2015 | 12:14:11 AM
edge
I thought for a moment that Samsung will have the edge with LoopPay. Nonetheless, how many stores are willing to take the risk on not upgrading their hardware/terminals, and doing so losing millions of customers on Android, Iphone/Watch and eventually an app from Microsoft?

In any case, what's faster?  To reach for your phone, look for the app and point it to the register or reach to your wallet and get the credit card? I don't believe mobile payments will replace credit cards anytime soon.
Thomas Claburn
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Thomas Claburn,
User Rank: Author
2/23/2015 | 7:18:06 PM
If you can't beat them...
...partner with them.
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