Google Is In Talks With Mobile Payments Company Softcard
It’s safe to say that competition in the mobile payment space is heating up, and it appears as though Google is looking to bolster its offerings. TechCrunch reports that the Mountain View-based company is reportedly considering buying mobile payments firm Softcard.
According to TechCrunch’s report, the deal may cost Google less than $100 million—a fairly small purchase for a company that spent $3.2 billion for Nest.
Softcard is a joint effort between AT&T, T-Mobile, and Verzion to provide a carrier-backed mobile payments system, and according to TechCrunch, over 200,000 US merchants accept payments made via Softcard’s Android and Windows Phone app.
Why this matters: On the surface, it’s unclear what, exactly, Google would do with Softcard, given the company has its own mobile payments system in Google Wallet. But when you consider the fact that AT&T, T-Mobile, and Verizon have all worked to block Google Wallet from most of its phones, Google’s motives become clearer.
In that context, purchasing Softcard makes more sense, and at under $100 million, it would be a veritable steal for Google. The fact that Google would add to its merchant network and userbase is icing on the cake.
Softcard’s rough ride
Media reports indicate that Softcard—which originally went by the rather unfortunate name of Isis Mobile Wallet—has had to endure various financial struggles since it launched in 2010. According to Recode reports, the company recently laid off 60 employees, and TechCrunch notes that, according to its sources, “at one point the company’s burn rate was around half a million dollars per day, or around $15 million per month.” These sorts of ongoing difficulties may play a role in Softcard’s relatively low asking price.
This is far from a done deal—TechCrunch notes that neither Google nor Softcard would comment about a potential acquisition—but from an outsider’s perspective, this sounds like a deal that would make sense for everyone involved.