Google is in talks to acquire mobile payments company Softcard, which is rumoured to be in trouble after laying off 60 employees earlier this month. Sources say that Google is interested in buying Softcard, the mobile payments company formerly known as Isis, for under $100m.
“Softcard is taking steps to reduce costs and strengthen its business. This includes simplifying the company’s organisational structure and consolidating all operations into its New York and Dallas offices, which involves layoffs across the company,” said a spokesperson for Softcard who declined to comment on the deal.
Softcard, which was created by AT&T, Verizon and T-Mobile to get into the mobile payments business, has struggled to get acceptance by merchants and recognition from consumers. Softcard offers the same contactless NFC mobile payments solutions as ApplePay and allows Softcard app users to activate cards from American Express, Wells Fargo, Chase and other banks in the app to use their phones to pay for items.
The FT reports that the sale of Softcard could represent analysts’ predictions that Apple Pay has forced other companies to rethink their positions in the mobile payment services market. “With Apple Pay picking up in popularity and PayPal going solo later this year every major tech company is rethinking their mobile payments strategy,” a banker not in involved in the deal told the FT.
The talks come as Google and other companies face the prospect of Apple dominating the mobile payment segment. The corporation’s recently launched Apple Pay service, which allows iPhone 6s users’ to link their phones with their credit and debit cards and pay for goods at many retailers, could see Apple become the leading player in this sector.
Google, which has already failed to make an impression with their Google Wallet, is also under pressure from emerging start-ups such as web and mobile payments company, Stripe which has recently closed a $70m fundraising round valuing it at $3.5bn and global multi-channel payments company Adyen which is valued at $1.5bn.
Mobile wallets are an attractive option for both retailers and consumers because they offer better security and also allow retailers an easier way of offering consumers special offers or loyalty programs.
Google however, isn’t the only company reported to be interested in buying Softcard, both PayPal and Microsoft are also rumoured to have approached the company.
By Nicole Miskelly, bobsguide Lead Journalist