Google all set to counter Apple Pay

By | February 24, 2015

Google is teaming up with three major U.S. wireless carriers to prod more people into using its mobile wallet to counter attack the latest Apple’s hit service. Google announced its teaming up with Softcard, the mobile phone payment firm, on Monday.

Google Wallet

The recent step of the Google is  the latest example of how the competition between Google and Apple is extending beyond the technology industry’s traditional boundaries.

The California tech giant announced Google Wallet would become a pre-installed ‘tap to pay’ app on Android smartphones sold in the US market by AT&T, T-Mobile and Verizon, as part of the deal with the carriers’ mobile payments company Softcard.  Ariel Bardin, vice president of Google Payments, states the aim is to help more android users get the benefits of tap and pay. The move gives Google and its large base of Android smartphones a stronger position to challenge Apple Pay, the mobile payments system embedded on the latest iPhones last year.

Apart from trying to make it more convenient to use Wallet, Google also is hoping to improve the nearly 4-year old service. Also, to make the Google Wallet better, the company seems to be acquiring some interesting technology and intellectual property from Softcard. Financial terms were not disclosed.


Although Google and the wireless carriers got a head start with their digital wallets, the concept had not gained much traction until Apple Pay debuted last fall. According to the recent presentation by CEO Tim Cook, the service has become more popular than Apple expected.

Just three months after Apple Pay’s November debut, Cook said the service accounted for two out of every three dollars spent across the three major US card networks, when no card was used. About 2,000 banks and credit unions have agreed to offer Apple Pay to its customers. Apple hasn’t said how many merchants are set up to handle its mobile payment services.

If Apple builds on that early momentum, the Cupertino, California, company could become the leader in what is expected to be a booming market. Nearly 16 million US consumers spent about $3.5 billion on tap-and-pay services last year, according to the research frim eMarketer. By 2018, eMarketer predicts those figures will rise to 57 million US consumers spending about $118 billion.

Companies that provide mobile wallets earn through collecting processing fees from merchants and banks.

The deal, Samsung electronics to buy the mobile payment startup called LoopPay, fueled the speculation that Samsung will include a digital wallet on its next phone. Apple Pay’s popularity probably helped forge the unlikely alliance between Google and the wireless carriers. Media reports, due to Google’s prickly relationship with the carriers, Google may consider selling its own wireless plans to consumers.

The pre-installation of the Wallet app is similar to what Google already does with its search engine, Gmail and YouTube on millions of other phones running on Android — an operating system that Google has been giving away for years to ensure people keep using its products on mobile devices. Google profits from the traffic by displaying ads.