Google has struck a distribution deal with one of the biggest wireless carriers in the United States of America. This will allow Google to get the Google Wallet payments app to be pre-installed on their phones. Simultaneously Google is also in the process of purchasing the technology from Softcard, which is the mobile payments app supported by the same carrier in the United States.
What is the deal all about?
This deal highlights the never seen before arrangement wherein biggest wireless carriers like T-Mobile, Verizon Wireless, and AT&T will be pre-installing the Google wallet on all their android phones in the United States of America. Google wallet enables the shoppers to tap their phones in some brick-and-mortar stores at the checkout in the similar manner as that of Apple Pay app. This deal also comprised of purchase of some intellectual property from Softcard, (known as ISIS initially) by Google. Reports suggest that none of the Softcard employees will be joining Google. Softcard has already informed their users that their mobile payment app can be used as if now. However, this can raise serious concerns for the wireless carriers who were in joint venture with Softcard, as they might not agree to this deal. This practically indicates the end of expensive multi-year initiative, Softcard. This deal is an iconic event for all the parties involved. Google was unable to use their tap and pay option earlier as the wireless carriers has blocked the Google Wallet technology to work on any model of their phones. Google took an initiative to find a solution to problem and starting working with the technology called as HCE, which gathered information from the cloud and was uncontrollable by the carriers.
This distribution agreement is very important for Google as one of their partner; Samsung is soon to launch their own mobile payment initiative. Samsung has already confirmed this information last week stating that they are in talks with payments startup called LoopPay about acquisition and using this technology in their mobile phones. While on one side installing the Google Wallet on the mobile might boost the usage but the company will still have to give a stronger reason to the people to not to swipe their cards and use the Google wallet.
The mobile payment space has seen a lot of competition in the last six months. Apart from Google and Samsung, Apple Pay payment service was launched by the Apple Company, which has practically become a nuisance for the formers apart from another group of retailer collaborating with Wal-Mart to start their own payment apps.
Big carriers and companies are already convinced that our wallets will be soon replaced by our phones. For carriers the mobile wallet technology might raise the stakes as they compete for consumers in the market. As far as Google is concerned, having a pre-installed payment app might convince customers not to move to Apple. Google will be able to get hands on lots of consumer data through the brick-and-mortar transactions and use the same to improvising their advertising strategy.