Google Inc reached a deal with mobile-payment service provider Softcard on Monday as the technology giant is looking to bolster its Google Wallet application to better compete with Apple Pay.
The Mountain View, California-based company said in its official blog that it had acquired technologies and intellectual property from struggling Softcard for an undisclosed amount.
Softcard has founded in 2010 by the three largest wireless carriers based in the US and it specializes in near-field communication, the technology which enables its users to settle transactions by simply tapping their smartphones to a payment terminal. Apple Pay also utilizes that method.
Later this year, AT&T Mobility, T-Mobile USA and Verizon Wireless will started pre-installing Googles digital wallet onto Android devices sold by the carries in the US.
Google Wallet, launched in 2011, is aimed at competing for customers with Apple Pay in a market that is quickly getting crowded as tech companies and retailers challenge each other for a bigger piece of the lucrative and fast expanding segment.
According to researcher eMarketer, customers settled around $3.5 billion worth of transactions via digital wallets during the past year, with projections that number to reach $25 billion in 2016 and $118 billion in 2018.
Apple may grab a significant piece of the estimated figure as it is already well ahead of the competition. Last month the iPhone maker said its mobile payment service accounted for two out of three dollars paid via a mobile device across the three major US card networks.
Apple has teamed up with more than 2 000 banks and credit unions in order to expand its Apple Pay reach. Although Apple managed to strike partnerships with companies like McDonalds and Whole Foods, it had no success with some major retailers.
Wal-Mart and CVS are among other companies are planning to enter the mobile-payment market via their own application dubbed “CurrentC”, which is based on QR codes rather than NFC.
Additionally, Samsung announced last week it had acquired mobile wallet LoopPay, spurring speculations that the South Korean giant will also join the market.
Analysts have projected more acquisition coming up this year as eBay prepares to spin-off PayPal, the number one online payment services provider.
Google lost 1.31% on Monday and closed at $531.91 at the NASDAQ, marking a one-year decrease of 11.20%. The company is valued at $367.79 billion.
According to CNN Money, the 40 analysts offering 12-month price forecasts for Google have a median target of $625.00, with a high estimate of $700.00 and a low estimate of $530.00. The median estimate represents a 17.50% increase from the last closing price.
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