Google to Buy Mobile Payments Service

According to the rumors circulating in the market, Google is in talks for acquiring Softcard, a mobile-payments company in a deal that would mean the search engine giant joining hands with the largest wireless carriers in the US for battling none other than Apple and the new Apple Pay service the company has recently introduced in the market. Softcard is owned by T-Mobile USA, Verizon and AT&T and last week, the firm had to lay off about 60 employees. Sources informed that the remaining staff had also been told to stop working while the company was searching for a buyer.
Exclusive negotiations were initiated by Google with Softcard when the internet giant offered to pay at least $50 million for purchasing the business, as per individuals close to the matter. Another company that expressed interest in buying Softcard was Paypal, the payment service that eBay is planning to spin off in this year. However, people with knowledge of the matter said that the telecom company owners of Softcard were giving Google a greater preference as a buyer because they all distribute smartphones that are based on the Android operating system of the search engine giant. Representatives of all firms involved were contacted, but none of them provided any information regarding the matter.
Google already has an existing mobile payments service named Wallet. Even though it was a pioneer in regard to mobile payment, the service was unable to gain any traction in the stores primarily because the company didn’t bother getting the cooperation of telecom companies such as Verizon and AT&T. Formerly known as Isis, Softcard was created by the telecom companies as their very own mobile payment service for competing with Google’s Wallet. However, Softcard also failed to get any response from the customers. In November, Apple Pay finally hit the market and has become immensely successful with both consumers and merchants.
This has created a sense of urgency at the telecom companies and Google, which has led to negotiations between the two regarding Softcard. Sources have revealed that instead of making a PayPal acquisition, teaming up with Google seems a more attractive alternative to the wireless telecom carriers and they have already created a revenue sharing model that they wish to use with Google. Google shares some revenue with the wireless carriers and it is mostly from the PlayStore and searches that are made on Android powered devices.

A closed-loop advertising system had been incorporated in the first version of Wallet by Google, which had intended to use a user’s buying pattern for targeting ads to them. The plan had been to share some of the revenue earned this way with the wireless carriers, but no agreement had been reached in this matter. Such advertising deals could see a revival if Google does end up acquiring Softcard and will put the telecom companies and Google in a better position. They will be able to provide tough competition to Apple’s newly introduced Apple Pay service, which has seen a good reception.

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