After the word last week that Google was buying technology and patents from Softcard, it is no surprise that the latter announced on Thursday that it is officially shutting down at the end of the month. Apple has become a huge player in the game with Apple Pay, which has single-handedly raised the public awareness of mobile payment services.
Samsung has fought back with its purchase of LoopPay and the introduction of Samsung Pay. The former uses older magnetic stripe technology that allows Sammy to instantly offer its service at 10 million retail locations as opposed to the 230,000 that connect to Apple Pay. But thanks to a combination of NFC and a proprietary technology called Magnetic Secure Transmission, Samsung Pay has almost universal acceptance at 30 million terminals because its service works on both NFC and traditional magnetic stripe terminals. Samsung Pay will debut this summer in the U.S. and Korea.
While focusing on the challenge offered by Samsung, Apple shouldn't take its eyes off Google. Softcard's website confirms that the service will end on March 31st and recommends that users switch to Google Wallet. Softcard was jointly developed by Verizon, T-Mobile and AT&T and as part of the deal with Google, all new Android phones sold by the three mobile operators will include Google Wallet out of the box.
Right now, Apple Pay and Google Wallet are limited to the number of retailers willing to build out NFC connected terminals. But a new law requires stores to upgrade their terminals to accept cards that use a chip and require a PIN, or else they will be financially responsible for fraudulent credit card transactions. This could push a large number of retailers to build out NFC systems in their stores very soon.
At the end of the day, the question isn't whether there will be enough consumer demand to make mobile payment services worth fighting over. The success of Apple Pay shows that there will be some people who will tap and pay. The question is whether or not mobile payment services can help sell smartphones.
source: Softcard via Forbes