Google announced on Monday that it made a deal with three big U.S. wireless carriers to have its mobile payment service Wallet pre-installed on mobile devices.
The search engine giant also said that mobile payments service Softcard will be integrating its technology into Wallet to improve its performance and functionality. Moving forward, all mobile devices purchased from AT&T, T-Mobile and Verizon Wireless running on Kitkat or higher will allow users to tap their smartphones on special sensors to pay for products.
Rumors about Google buying Softcard for $100 million first surfaced earlier this year, although analysts have warned that doing so is not a good business decision.
But with Apple Pay that is taking the mobile payments market by storm and Samsung acquiring LoopPay as preparation for its own mobile payments service, Google is pressured to expand its services. The three wireless carriers were not that difficult to convince because unlike Apple Pay, Google is sharing some revenue with them, according to sources from the Wall Street Journal.
"This is an important step for Google Wallet, but it won't be the only mobile wallet option Android users will have," eMarketer analyst Bryan Yeager wrote in an email to USA Today. "Samsung's recent acquisition of LoopPay and intention to release its own mobile payments system shows that deal activity doesn't necessarily equate to market consolidation."
Google Wallet is not a newbie when it comes to mobile payments as the service has been around for more than 3 years. It has partnered with major credit cards such as Visa, Mastercard and Discover with Sprint as its first mobile carrier.
Softcard users can continue to tap and pay while Google works with the developers in transitioning the service. More details should be available in the next few months while Google Wallet is expected to be pre-installed on the mobile devices later this year.
