There are unconfirmed reports about Google procuring mobile commerce company Softcard previously known as ISIS. Catching up with Apple Pay, Google is looking to invest in a similar mobile pay service for Android users. Softcard, similar to PayPal, Google, and Dwolla etc., has been trying hard to hold its ground in the competitive digital wallet market but the launch of Apple Pay has changed the consumer market completely. The U.S. mobile payments market is expected to grow to $142 billion in 2019, according to research firm Forrester. It currently stands at about $50 billion.
Techcrunch reported that the price may be under $100 million, the low cost pointing towards a probable crisis at Softcard. They reportedly downsized its employees laying off about 60 employees earlier this month and has been in a consolidation phase. According to Ed Busby, Softcard’s former chief commerce officer, spoke to techcrunch in the matter stating: “It’s unfortunate that they’ve chosen now as a time to scale back,” “Externally, for the first time since I’ve been in this industry, the signs are pointing positively for mobile payments.”
A spokesperson said: “Softcard is taking steps to reduce costs and strengthen its business. This includes simplifying the company’s organizational structure and consolidating all operations into its Dallas and New York offices, which involves layoffs across the company,” (source: redcode). Sources at techcrunch however said that, “People at Softcard have a limited view on what’s going on,” The whole place has been in a complete depression for at least six to eight months, to the point where people weren’t coming to work, and were being told in December to take it easy through the end of the year. In general, it’s not a culture with a lot of transparency, so a lot of people are thinking the worst.”
The founders of Softcard – AT&T Mobility, T-Mobile USA and Verizon Wireless developed the idea to use the power of the mobile phone to offer consumers a safer, simpler way to shop, pay and save. With Softcard, users can make payments at hundreds of thousands of merchant locations nationwide, even apply loyalty cards and redeem money-saving offers at select merchants. Softcard features state-of-the-art technology to enable contactless payments and helps protect user information by adding multiple layers of security such as PIN-protection, encryption and one call or click to remotely disable the app on a lost or stolen phone.
Softcard uses NFC (near field communication) technology to send payment info at checkout. Adding an eligible American Express, Chase, or Wells Fargo, credit card and get all the same perks and benefits from the card issuer. Or set up an American Express Serve Account that you can add money to with your preferred debit card, credit card or U.S. bank account.
Google, however, has not confirmed these reports and has dismissed them as rumors in an emailed statement according to techcrunch: “We don’t have a comment, background, deep background, off the record steer, nod, wink or any other verbal or non-verbal response to these sorts of rumors,”
Google also appears to be interested in Softcard’s more than 120 patents and applications for patents, according to TechCrunch. Paypal and Microsoft have also reportedly shown interest in purchasing Softcard. Techcrunch also suggested that JV partners AT&T or Verizon might be taking it under one of their wings if an external sale is not achieved, although they have also been looking at developing their own wallet services for mobile devices.
Google’s three-year-old Wallet maintains a lead over Apple with about 4.0 percent of the market, but according to an ITG analyst said Apple Pay users are more engaged, which indicates a positive turn of events for Apple Pay. PayPal currently leads over both Apple and Google with 78 percent of the market, while Square holds 18 percent of the market.
(image credit: Ray Bouknight)