Softcard, owned by AT&T Mobility, T-Mobile US and Verizon Wireless, has closed its doors following the sale of some technology and intellectual property (IP) to Google.
Google recently announced that Android phones sold by these telcos in the US will soon come pre-installed with Google Wallet. The internet giant also said it was acquiring technology and IP from Softcard.
Softcard used a statement to plug the Google Wallet: “Google has acquired some technology and intellectual property from Softcard and we encourage our Android users to download Google Wallet. In the near future, the Softcard app will shut down and all wallets will be terminated. A specific termination date will be provided soon.”
Google Wallet was introduced in 2011 but the rapid growth of Apple Pay has forced Google to invest more into the app. Samsung has also entered the fray. The smartphone maker recently acquired mobile payments startup LoopPay and is expected to present the acquistion when it launches its next smartphone in March 2015.
Standalone mobile banking app makers will find it increasingly difficult to compete independently as large technology companies and financial services firms develop their own software for mobile banking. For example, British mobile banking software maker Monitise has put itself in the shop window, announcing it could benefit from being part of another business.
Read more about mobile banking
- Google is in talks to acquire mobile phone payments company Softcard as it increases its financial services capabilities
- Mobile banking software maker Monitise has put itself in the shop window, announcing that it could benefit from being part of another business
- Google is working with US telcos to boost its mobile wallet amid the fierce challenge from Apple Pay and Samsung
In February 2015, shares in the UK company dropped by 10% on news the company might report a drop in revenues. Monitise said it is reviewing its options, including the company being taken over. IBM and Oracle have been named as potential candidates to do so.
IDC Financial Insights research manager Andrei Charniauski said the mobile banking sector software is becoming very congested and consolidation is inevitable.
“Making a compelling business case from pure mobile payment solutions is a near-impossible task right now. I don’t see this changing," he said.
"I am afraid software is a very competitive business and many major players, such as core banking vendors and newcomers, have upped their game in mobile banking offerings. This is certainly something Monitise didn’t expect and they are paying for it.
"If I was a core banking vendor with no mobile offering, I would probably consider acquiring Monitise. But how many such vendors are there in the market?"