Since its earliest days, the payment system Softcard seemed doomed to failure: Take a consortium of wireless carriers and have them create a user-friendly way to pay with your phone. On Monday, Softcard’s key partners, AT&T, Verizon, and T-Mobile, admitted defeat, selling some technology scraps to Google and agreeing to support Google Wallet on Android phones.
Google Wallet emerges from the deal as the clear way to pay with Android phones at retail stores with newer equipment that support NFC, or near-field communication, payments—including those that have recently upgraded to support Apple Pay, which also uses NFC.
“For now, Softcard customers can continue to tap and pay with the app,” Softcard wrote in a concessionary announcement. “We will share more information with customers and partners in the coming weeks.”
Just as Apple and Google want to control payments in their digital app and content stores, it makes sense that they want to play gatekeeper over retail payments on devices running their software.
That leaves PayPal and perhaps Samsung, which recently acquired payments startup LoopPay, as the main alternatives to Apple and Google’s built-in digital wallets.
Samsung obviously wants to hedge against Google’s software dominion on its hardware. But PayPal could be the far more interesting indie player in payments—especially as it prepares to spin off from eBay and become a separately traded company.
The challenge for developers, already beholden to the smartphone giants for access to customers, is that they’ll need to support both Google Wallet and Apple Pay to reach mobile customers. PayPal has an opportunity here to market itself as a one-tap shop.
The question that all the players in the payment space need to wrestle with is whether the tap, as a payment gesture, has any meaning. As retail theater, a performative mechanic intended to convince the customer that payment has been registered, perhaps so. But it’s hardly better than the swipe, the familiar payment gesture it will replace, or the dip, which we’ll have to do with newer chip cards later this year.
The payment system of the future will happen in the cloud, verified by biometrics, behavioral data, or a combination thereof. We won’t swipe, tap, or dip. We’ll just pay. NFC is just a transitional technology, originally developed to deal with expensive, balky telephone connections of decades past.
We see a glimmer of this in apps that let us order ahead for pickup. Google Wallet and Apple Pay will have a role in these transactions, too, as in-app payment methods—and crucially, they won’t require permission from carriers or phone manufacturers to process such payments.
That may well be why Softcard admitted defeat, since it was never going to have a role in app-based payments. PayPal has been talking about “one-touch” mobile payments—but it’s actually most interesting when it powers zero-tap payments, like Uber’s automatically billed rides.
We don’t need to replace the swipe with slower, more cumbersome checkout processes, as Softcard attempted to do. We need to eliminate the swipe, the tap, and the dip altogether.
This 2006 commercial from IBM has it about right: We don’t need new ways to pay at the checkout. We need to end the whole outdated ritual of retail theater.
Put it on my account.
Lead image courtesy of Softcard