Rumor: Google To Buy Softcard, Indirectly Responsible For Failure Of Google Wallet 1.0
Carriers' interest in payments company prompted blocking of Google's Wallet.
According to a story in TechCrunch today, Google is thinking about buying Softcard (formerly ISIS, compelled to rebrand for obvious reasons). The potential purchase price is rumored to be $100 million or less.
With many times that invested and minimal adoption, Softcard is a failure. This is what I and others long ago predicted for the company started in 2010 by three out of the four major US mobile carriers: Verizon, AT&T and T-Mobile.
If the rumor is true the irony would be fantastic.
When it launched in 2011, Google Wallet was almost immediately blocked by Verizon and the other joint-venture partners, citing security concerns. Yet it was fairly obvious that the carriers wanted to protect ISIS and feared that it would be marginalized if Google Wallet were to gain traction.
Only Sprint, the non-participating carrier, embraced Google Wallet. Google Wallet (in its offline form) languished. All the original executives came and went. Google Wallet survived as the company’s payments hub but the near-field communications (NFC) offline functionality went into hibernation.
Beyond carrier obstruction, NFC wasn’t widely embraced by merchants or consumers. The outlook for NFC-based mobile payment systems was pretty grim. Enter Apple Pay, which relies on the same technology and has totally changed the game and made NFC viable in the US in a way that it previously was not. In so doing it has also revived the prospects of rival Google Wallet.
Mobile payments have now arrived, but Softcard is already an also-ran unlikely to gain any new momentum. TechCrunch says that its sources indicate Google’s interest in the company is partly for its patent portfolio. Softcard also has a range of relationships (including with its carrier investors) that could be valuable to Google.
The thought of buying the company that was indirectly responsible for the failure of one of its high-profile initiatives has got to be relatively satisfying for some of the folks at Google. There’s something almost Count of Monte Cristo-esque about it.
Adding yet more irony, Google probably wouldn’t even be considering the transaction if it weren’t for rival Apple’s success in cracking the code and generating awareness and momentum for NFC-based mobile payments.