Google recently acquired technology and patents from mobile wallet service Softcard. The company is now better prepared to compete with Apple on the mobile payments front, however, this deal is not the only one to take place recently. It seems companies are moving fast to attract new consumers, enhance their services and ultimately, edge each other out.
Google’s mobile payment system will get a nice boost from Softcard
Bloomberg reported that Google recently purchased patents and technology from Softcard, a mobile wallet service that is endorsed by the most prominent wireless providers in the United States. Integrating Softcard’s features into Google Wallet will allow the company to compete with Apple Pay and possibly begin to win some market share back from its main rival. Softcard is backed by AT&T, Verizon and T-Mobile. This is sure to help Google gain a competitive edge over Apple.
The news source noted that the three wireless providers will help Google by working to pre-install the Google Wallet app on new Android phones in the market. Smartphones with Google Wallet already onboard will likely help promote the technology and increase adoption rates.
USA Today pointed out that Android smartphones running on the KitKat operating system, or more recent versions, will be the ones to have Google Wallet pre-installed. These phones will allow tap and pay purchases – customers can tap their smartphone on point-of-sale devices to finalize transactions. The new service is set to be introduced later this year.
Google Wallet is now better prepared to compete with Apple Pay
According to Bloomberg, Apple Pay is currently responsible for $2 out of $3 of purchases made using mobile payment technology. Google released its mobile wallet service in 2011, years before Apple, but does not enjoy the same level of endorsement from retailers and consumers. It is clear that the company is looking for ways to attract new users and make its technology more widespread. Recent statements indicate, however, that the company is optimistic about recent developments.
“We’ve received great feedback from people who use this feature and we’ve continued investing to make it easy and secure for more people to pay with their phones,” Google said, according to Bloomberg. “A big part of this is working with other innovators in the industry to help provide a seamless experience across a wide range of phones and stores.”
The mobile payment competition continues…
USA Today reported that the mobile payments industry is expected to grow considerably over the next few years. According to forecasts from eMarketer, mobile payments were worth $3.5 billion last year, but will reach $118 billion by 2018. Bryan Yeager, analyst at eMarketer, pointed that Google’s alignment with Softcare is not the only partnership in the industry.
“This is an important step for Google Wallet, but it won’t be the only mobile wallet option Android users will have,” said Yeager, according to the news source. “Samsung’s recent acquisition of LoopPay and intention to release its own mobile payments system shows that deal activity doesn’t necessarily equate to market consolidation.”
Bloomberg also noted that while Apple Pay continues to gain market share, eBay’s PayPal is still the number one service for mobile and Internet payments. ITG Investment Research indicated that PayPal is responsible for 78 percent of digital payments, Google Wallet is responsible for 4 percent, and Apple Pay only 1 percent. It is important to mention, however, that PayPal has been around for a long time, while Apple Pay is new and rising quickly. These rankings will likely be quite different at year’s end.
Google’s deal with Softcard and Samsung’s acquisition of LoopPay make it clear that technology companies are vying for the top spot in the mobile payments space. Apple Pay seems to be the trendiest product, and PayPal is the most established. Samsung and LoopPay, on the other hand, will soon have the benefit of owning technology that is compatible with 90 percent of sales terminals. It remains to be seen what will be the deciding factor for consumers – contactless payments, security, convenience, pre-installed apps or other considerations. It will be interesting to see how this situation unfolds.Back To Blog