Google
Inc. is reportedly interested in acquiring Softcard, a mobile payments
service, for less than $100 million. Softcard is a joint venture between
AT&T, Verizon and T-Mobile, that the search giant and Android
developer hopes will improve its Wallet service amidst increasing competition from Apple Pay.
According to a report from TechCrunch,
“people familiar with the situation” say that Google’s price is much
lower than the money that Verizon, AT&T and T-Mobile have spent on
developing Softcard since it was founded in 2010. The company has laid
off a number of employees as it reportedly is spending upwards of $15
million per month.
“Softcard is taking steps to reduce costs and strengthen
its business. This includes simplifying the company’s organizational
structure and consolidating all operations into its Dallas and New York
offices, which involves layoffs across the company,” a spokesperson told
TechCrunch.
Google routinely refuses to comment on speculation about
acquisitions until
they have been completed. Earlier reports have
claimed that Google, along with Paypal and Microsoft were interested in
acquiring Softcard.
Mobile payments in Softcard are processed through
near-field communication, or NFC, the same kind of wireless technology
used by Apple Pay in the iPhone 5S and iPhone 6. Softcard claims it can
be used at over 200,000 merchants, including fast food giants McDonalds
and Subway. The Softcard app works on Windows Phone and Android, making
payments from connected debit and credit cards offered by American
Express, Chase, Wells Fargo and others.
Google is interested in Softcard reportedly for its
portfolio of over 120 patents and patent applications related to mobile
payments, TechCrunch said. One former employee said that the layoffs
were bad timing for Softcard, as Apple Pay could ignite interest in
mobile payments.
“It’s unfortunate that they’ve chosen now as a time to
scale back,” says Ed Busby, former Softcard chief commerce officer, told
TechCrunch. “Externally, for the first time since I’ve been in this
industry, the signs are pointing positively for mobile payments.”
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