Google Wallet partners up to battle Apple Pay
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Google said on Monday it was teaming up with the mobile phone payment firm Softcard to ramp up its efforts to counter Apple Pay in the emerging sector.
The California tech giant announced Google Wallet would become a pre-installed “tap to pay” app on Android smartphones sold in the US market by AT&T, T-Mobile and Verizon, as part of the deal with the carriers’ mobile payments company Softcard.
The aim is “to help more Android users get the benefits of tap and pay,” said Google Payments vice president Ariel Bardin.
“We’re also acquiring some exciting technology and intellectual property from Softcard to make Google Wallet better.”
The move gives Google and its large base of Android smartphones a stronger position to challenge Apple Pay, the mobile payments system introduced on the latest iPhones last year.
A statement from Softcard — which was founded by the three carriers last year in a push for mobile payments — said the deal with Google would “bring together leading technologies to advance mobile wallets.”
“For now, Softcard customers can continue to tap and pay with the app,” the statement said.
“Today’s announcement is a positive step forward for the mobile payments industry and wireless consumers.”
Bryan Yeager, analyst at the research firm eMarketer, said the deal “will help get Google Wallet in front of more potential users, but the mobile payments space in the US will continue to be competitive and fragmented for at least the next few years.”
Yeager noted that Samsung’s announcement last week that it was buying digital wallet firm LoopPay “shows that deal activity doesn’t necessarily equate to market consolidation.”
LoopPay technology is compatible with approximately 90 percent of retail terminals to let customers tap their phones for payment with registered credit cards, according to Samsung.
LoopPay has been built into smartphone cases as well as into fobs, or dongles, and transmits credit card data using magnetic fields to point-of-sale terminals to effectuate transactions.
Questions & Answers
Q.What is Google's main objective in partnering with Softcard?
What is Google's main objective in partnering with Softcard?
Google aims to boost its efforts against Apple Pay in the mobile payments sector. The partnership will pre-install Google Wallet on Android phones from AT&T, T-Mobile, and Verizon, helping more Android users access tap and pay features.
Q.What specific benefits will Google gain from this deal beyond wider distribution?
What specific benefits will Google gain from this deal beyond wider distribution?
Google is also acquiring exciting technology and intellectual property from Softcard as part of the deal. This is intended to improve Google Wallet and enhance its capabilities for users in the future.
Q.How does the analyst quoted in the article view the long-term impact of this deal on the US mobile payments market?
How does the analyst quoted in the article view the long-term impact of this deal on the US mobile payments market?
Bryan Yeager believes the deal will increase Google Wallet's user base. However, he predicts the US mobile payments space will remain competitive and fragmented for several more years, despite such deal activity.
Q.What alternative technology has Samsung recently acquired that differs from standard tap-to-pay systems?
What alternative technology has Samsung recently acquired that differs from standard tap-to-pay systems?
Samsung acquired LoopPay, a digital wallet firm, which uses magnetic fields to transmit credit card data to point-of-sale terminals. This technology is compatible with approximately 90 percent of retail terminals.