Google Inc. (GOOG, Financial) has inked a deal with three of the biggest wireless carriers, AT&T Inc. (T, Financial), T-Mobile US, Inc. (TMUS, Financial) and Verizon Communications Inc. (VZ, Financial) to pre-load Google Wallet on its smartphones. This Mobile Wallet will be available later this year on devices running Android 4.4 KitKat and higher. In order to improve Wallet's performance, the internet giant is also set to purchase intellectual property from Softcard, the mobile payments company.
Company look back
Google, the American MNC, deals with Internet-related services and products like cloud computing, search, advertising technologies, etc. The company has acquired various companies ranging from Keyhole, Inc toDeepmind Technologies. A few other acquired companies are Global IP Solutions, Quickoffice, Waze, etc. Google CFO Patrick Pichette said that Google's 2014 yearly earnings were $66 billion. The revenue showed a 19% increase as compared to 2013 yearly revenue. The fourth quarter 2014 earnings was $18.1 billion in-spite of currency fluctuations.
The deal
Since the mobile-payment war has been heating up in the past few years, Google has very intelligently teamed up with Softcard. Under this deal, all Android phones sold by the three companies will have pre-installed Google Wallet apps. Consumers can then use their smartphones to pay for in-store purchases. This service will function similar to that of Apple Pay. Further more, the technology and intellectual rights from Softcard will advance Google Wallet to another level altogether! Softcard app users will however continue to use the tap and pay feature for their purchases. Bryan Yeager, analyst at eMarketer said that the deal will help to obtain more potential users. However, competition will still surface on the mobile payments space for the next few years. This will mainly happen since different stakeholders will try to woo more consumers.
Although Google Wallet was first launched in 2011, it did not receive widespread recognition since carriers blocked the app. The internet giant then tried to work on that front with HCE technology which ensured that payment information can be obtained from the cloud. But this did not work out the way it was supposed to work. Not only that, even Softcard failed to gain widespread adoption.
Google and competition
Google's decision to revive Google wallet comes after the success of Apple Pay, only available to iPhone users. Not only that, but Samsung (SSNLF, Financial) and a few Walmart Inc. (WMT, Financial) retailers are planning to come up with their own payment app. Samsung acquired LoopPay, Inc., last week. Hence, Google has to deal with tough competition on the mobile-payment front. However, Google still has to ensure that they give consumers good reasons to use Google Wallet rather than swiping their card for in-store purchases. Google said in a statement that they have received great feedback from people who already used Google Wallet. Hence they are investing to ensure that easy and secure payments can be made through smartphones. By working with other innovators in the industry, a seamless experience can be provided, Google said. Better target advertising can be done and Google could also get more data on all brick-and-mortar transactions.
Takeaway
Google and Softcard said that more information about the deal will be made known in the coming few weeks. It seems that the tech companies are trying to replace our physical wallets with our phones. If Google offers well-received mobile payments technology, Android users could defect from Apple. Significant growth can therefore be observed in the years to come on the mobile-payment front. In the year 2014, physical mobile transactions totaled to $3.5 billion. According to eMarketer, the physical mobile transactions can reach $27.5 billion by 2016.
