The tap-and-pay mobile payments market in the U.S. is getting a little less confusing.
On Monday, Google said it had reached a deal with three of the country’s major cellular carriers to acquire “technology and capabilities” from Softcard, a competing mobile wallet app developed jointly by the carriers. But the deal appears to be less about technology and more about branding.
The biggest immediate change is that Verizon, AT&T and T-Mobile will begin preinstalling Google Wallet on new Android smartphones later this year—something that had been blocked before in preference for the Softcard app.
At their heart, both apps are based on the same contactless payment technology as Apple Pay and a new generation of payment cards from banks and credit unions. They use NFC (near-field communication) to complete a transaction once a payment card or phone is brought within a few centimeters of a terminal.
Apple Pay brought the technology widespread recognition when it launched late last year, but Google Wallet has been around since 2011. However a lack of support from carriers, retailers, card issuers and Google itself had relegated the technology to the sidelines.
While Google Wallet and Apple Pay share a technology base, there are key differences in how they work. Perhaps the biggest is that in Google Wallet, all transactions are routed through Google before being charged to the customer’s credit card.
That gives Google even greater insight into the lives of its users. In contrast, Apple doesn’t see any details of purchases made on its system.
Getting the Google Wallet app in front of more consumers could help reduce confusion over the different brands—an important consideration when the biggest Android phone maker is making moves of its own in mobile payments.
Last week, Samsung said it was acquiring LoopPay, a startup that allows people to make payments with their phones on almost any payments terminal.
The LoopPay system relies on magnetic induction to send data to the read-head on a magnetic card swipe reader. The technology isn’t as sophisticated as Google Wallet or Apple Pay but it has the advantage of working on almost any retailer terminal—something that is far from true for NFC systems.
LoopPay currently requires an add-on phone case, but Samsung’s acquisition could mean the technology is embedded in future handsets. At CES this year, LoopPay said it is also working on its own NFC-based system.