After a brief reincarnation as Softcard, it appears that the NFC provider Formerly Known As ISIS (FKAI) is on the point of being jettisoned by its carrier owners and sold to Google.
Within days of an announcement that
Softcard/FKAI was laying off more than 60 staff,media reports suggested that
Google was in talks with AT&T, Verizon Wireless and T-Mobile USA, with the mooted purchase price believed to be less than $100 million.
Softcard/FKAI has not enjoyed a happy life. Launching (somewhat later than originally planned) into a market where contactless payment activity was virtually non-existent, it found itself obliged to fly the flag for the mechanism while the US hesitated on the brink of deploying EMV and with it a new generation of contactless cards. Furthermore, although the bulk of POS devices that shipped during Softcard’s infancy possessed contactless, retailers were either stockpiling them or disabling the facility.
The company never released details of wallet user numbers, but in May 2014 CEO Michael Abbott said that over the past 30 days ‘We have averaged over 20,000 ISIS Wallet activations a day and our growth rate doubled over the prior month’. However, Softcard/FKAI did not reveal how many activated wallets were then used for contactless payments. It should also be observed that the 20,000 activations per day coincided with a ‘Share the Love’ programme whereby if a wallet user referred a friend and that friend activated his or her wallet, then both the original wallet user and the new user would receive a $10 Amazon voucher; the scheme permitted up to 15 friends to be referred. This was splendid both for the end users and for Amazon, but did not necessarily achieve the desired result of contactless transactions in volume.
Then there was the name, which given the prevalent political climate was not, shall we say, ideal. The company acted fast to rebrand, but not before someone had unhelpfully pointed out that only one ISIS published an annual report, and it wasn’t the one trying to persuade people to make proximity payments in a testbed of Utah retail outlets.
However, above and beyond this, Softcard/FKAI suffered two critical blows. The first came in the form of HCE (Host Card Emulation), which enabled the deployment of an NFC SE (Secure Element) in the cloud rather than on the handset. This mean that a financial institution or OTT could deploy a contactless solution without having to pay a slice to the carriers. A number of banks – although not yet those in the US – have already gone down that road.
But for Softcard/FKAI, the cruellest blow came in the form of Apple Pay, which launched in October 2014 using an embedded SE (again, no need for carrier involvement) and garnered 1 million registrations in the little matter of three days. Given the prevalence of the iPhone in the US, an Apple NFC solution which did not require the services of the carriers was the last thing Softcard needed.
So can Google succeed where Softcard has failed? Certainly, adoption of Google Wallet has not been spectacular, but the opportunity for Google now lies in picking up on the greater awareness of NFC that will filter through in the wake of Apple Pay – using a solution which leaves the carriers out in the cold.