A few months back we praised Apple Pay, calling it the potential solution to in store attribution, and several readers wondered where Google Wallet – which has been around longer – fit into the picture.
Now, Google Wallet is carving its place in the mobile payment market with their potential acquisition of Softcard, a mobile payment platform much like Google Wallet and Apple Pay.
So why buy Softcard when they already have Google Wallet? Essentially this deal may be what it takes to give Google Wallet (or perhaps Softcard if Google chooses to pursue that brand) a fighting chance to gain more of the market from Apple Pay. Here’s why.
Why this is a good deal
Buying Softcard would mean Google gains access to T-mobile, AT&T and Verizon’s customers, which would give Google the boost it needs to go head to head with Apple Pay.
One of the biggest problems for Google Wallet was adoption. Few wireless providers adopted Google Wallet, and with these three major American players at its back Google takes a big leap forward. T-Mobile, AT&T, and Verizon specifically blocked Google before, since it was these telecom companies that launched Softcard in 2010 in direct competition with Google Wallet.
This acquisition could gain Google more than 150 million customers, beyond the 56 million customers they already have associated with Sprint and other local service providers.
Apple’s recipe for success
While only recently released, Apple Pay has been hugely successful, connected with 8 of the top 10 banks in America and owning an estimated 1% of all digital payments in November 2014, only months after its launch in September.
With support from banks and retailers, Apple Pay has been able to gain momentum quickly, something Google Wallet never did.
Google’s potential acquisition of Softcard is their attempt at building a similarly sized ecosystem, to rival the hundreds of millions of customers Apple Pay serves.
The missing piece
The one piece missing after Google acquires Softcard (if that were to happen) is that Google Wallet and Softcard are not as easy to use as Apple Pay.
While this acquisition could give Google a chance at gaining more of the market, the average user prefers Apple Pay to Google Wallet simply because Apple is more convenient. With Touch ID security, Apple users don’t have to unlock their phone, open the app and type their pin to pay – they just tap and go like a paypass credit card – and it’s that touch and go capacity that people like, not just the fact that they’re using their phone to pay.
So will Google start to take over the mobile payment market by buying Softcard – not quite. There’s still a ways to go.