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Mobile payments platform Softcard is being shut down as part of an agreement made by Google with the mobile network partners AT&T, T-Mobile, and Verizon, which have agreed to install Google Wallet on their Android phones in the future. The operators created Softcard, which was recently rebranded from Isis Mobile Wallet, in 2010 to gain a foothold in mobile payments.

The telcos had to battle with two strong ecosystems

After Softcard launched in 2013 it faced a series of business, technical, and marketing challenges. AT&T, T-Mobile, and Verizon had created the platform to gain a position in the emerging mobile payments market. It was a valiant effort, but the operators soon realized that it brought them into conflict with a financial ecosystem, stalling any real progress. They had struggles with banks, credit/debit card issuers, point-of-sale vendors, and various financial clearing houses that had consistently failed to cooperate on their own mobile payments systems. They also had problems with the mobile device players (both OS and device vendors) that had to be aligned to support this effort. The operators were effectively forced to battle with two different, entrenched ecosystems.

In addition to the technical challenges and the limitations of Softcard’s drawn-out launch, the business model was hijacked by players from both ecosystems, making it impossible for the initiative to gain any real, scalable traction. Ovum believes that it would have been difficult to guide even a flawless mobile payment program to success given the number of different players in the mix. Softcard needed to align itself with major players in the vertical, securing strategic partnerships and alliances early on. Catching the wave at the right time and making the appropriate strategic relationships within an ecosystem can be the difference between success and failure.



Mike Sapien, Principal Analyst, Enterprise Services

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