Ever since Apple announced its mobile wallet platform Apple Pay, rumours have been floating around that Google too, is serious about getting into the business. Now, TechCrunch reports that Google is indeed in talks with Mobile Payments firm SoftCard, for a just under $100 Million acquisition.
SoftCard (earlier named Isis), which was started as a Joint Venture by telecom majors AT & T, Verizon and T-Mobile has been findng it difficult to make money, despite all the three telecom giants pouring in Million of dollars into this mobile payments venture.
In fact, a $100 Million price for the company is itself a testimony to the fact that SoftCard is in deep troubles as an enterprise and finding it hard to get customers. Google’s buy-out will probably come as more of a relief for the JV partners rather than just another acquisition.
A spokesperson told TechCrunch,
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, we believe these efficiencies will best position Softcard in the marketplace while maintaining focus on serving our market.
Moreover, Google declined to comment, and mailed the following in response to TechCrunch’s queries
We don’t have a comment, background, deep background, off the record steer, nod, wink or any other verbal or non-verbal response to these sorts of rumors.
The entire acquisition, if goes as planned, will turn out to be a huge bargain for Google. It will not have to invest in setting up a new payment system altogether, and would benefit from the expertise which the three telecom giants had put in. Moreover, Softcard’s 200,000 partner merchants in the U.S. will obviously be a good starting number for Google.
SoftCard’s valuation and customer traction has never been clear. However, a source told TC, that the burn rate for the company was over half a Million per day. (approx. $15 Million a month)
Softcard app users can activate payment cards from American Express, Chase, Wells Fargo and other banks in the app and can then use their phones to pay for things with those particular merchants.