Softcard, the carrier-backed mobile payments initiative, is shutting down its app after striking a deal to help expand the reach of Google's mobile payments system.
The joint venture between Verizon Wireless, AT&T and T-Mobile announced Wednesday it would disable its mobile app and close all customer accounts on March 31. As part of the deal announced last month, Google acquired Softcard's technology, while the US carriers agreed to load the Google Wallet app onto Android smartphones running KitKat or higher in their stores later this year.
The closure comes amid intensifying competition for mobile payments, the ability to pay for goods and services with a smartphone. On Monday, Google took the wraps off a mobile payment service calledthat will compete with Apple Pay and at Mobile World Congress in Barcelona.
Previously known as Isis, the initiative was formed by wireless carriers in 2010. After years of testing, it launched nationwide in 2013 on Android smartphones, using near-field communications, or NFC, a technology that uses an embedded chip to talk with compatible registers.
But the launch was bumpy. Critics immediately complained of the app's incompatibility with rooted Android phones, as well as the complicated process of getting a special SIM card to run the service. The initiative updated the app to deliver a cleaner presentation and laterin an effort to divorce itself of a word used to describe the terrorist group Islamic State of Iraq and Syria, also known as ISIS.
Mobile payment are expected to explode in popularity by next year, growing to $27.5 billion in US transactions from last year's $3.5 billion, according to market research firm eMarketer. The number of mobile payment users in the US is expected to hit 36.2 million next year, more than twice the number using digital wallets in 2014, the researcher said.