Mobile Payment Service Domain is getting more and more attention day by day. Giants like Apple, Google are trying their heart out to grab the available market base. Electronic fund transfer companies like Visa, MasterCard, PayPal and lots of startups are trying for partnerships with these technological giants.
Those who have exited this lucrative market are MSN Wallet, Yahoo! Wallet, AOL Wallet, Wallet365 etc. The next name making the exit was Softcard. Google bought it and integrated it with Google wallet in Feb’15 which has now been replaced by Android Wallet. At the helm of all this turmoil is the mobile based $650Billion payment. Day by day more and more customers are opting for this mode of payment.
Here is an analysis by FS Labs for why Softcard ran out of steam just in 18 months after its launch!!
- Inception: Started as Isis Wallet, with a backing of AT&T, T-Mobile & Verizon, it was an attempt to compete mobile payment firms – PayPal & Google Wallet. Trio of the mobile carriers blocked Google’s attempt to enter into mobile payment service by using NFC and started Isis Wallet with an aim to control Secure Pin technology.
- Product on offering: An Isis App would enable customer’s Smartphone to be their banker in all regular Sears & Roebucks. Customers obedience in carrying Smartphone everywhere would be utilized for more swift payments at regular goods & service at point of sales location equipped with NFC. It enabled a contactless communication through a simple waving of Smartphone over NFC compatible devices for send information. Customers Wallet was always secure in their pocket.
- How innovative it was ? Bills would be paid without taking out actual card or time consuming card swapping and then waiting for payment to happen- this was the intend. Credit card numbers would never be shared with the merchants , thereby reducing risk of frauds. Merely by saving the credentials on App would make customer ready for mobile based payment. Few voted for it as very innovative but it lacked the loyal customer base like that of apple or android.
- Was this product a problem solver ? Few would argue if Isis Wallet solved any real life problem. All it did was solving a non-existent problem. At the time of launch of Isis Wallet, customers were quite happy in paying though cards. By contrast unawareness of how to use Isis Wallet platform on mobile lead customers to make payment through Isis wallet a time consuming option.
- Growth of Isis Wallet: Initial backing of Isis wallet by Telco’s was the basis that it would compete against likes of Visa & MasterCard. Major mobile manufacturers supported it and ensured including Isis platform in all mobiles at manufacturing stage. In fact Google was blocked by Telco’s for providing Isis Wallet an unparallel growth.
- Reach in customer base : For attracting customers and educating them about NFC technology , one million complimentary Jamba Juices were given away to Softcard users. Despite these efforts, the adoption rate of Softcard was not good enough to sustain the business. It always remained last proffered option among the mobile payment service providers.
Why it failed ?
As Hsuan-hua Chang puts it “After all, a vision has to be either supported by a market demand or inspiring enough to create a new market entirely. Isis Wallet never did that.”
- Limited reach and Deviating the initially decided path – Initiated by the trio of Telco’s as a payment method that would compete against Visa and MasterCard, Isis Wallet lost the battle as soon as it lost its conviction to compete. Softcard was initially limited to a handful of Android devices from the three carriers and required a distinct app specific to each one of those carriers. The moment that ISIS decided to just become a mobile wallet (with no value proposition) that would incorporate payment methods such as Visa, MC and Amex, was the turning point which made it stand last in the list of many payment gateways.
- Controversial Name & Re-branding – Remember Isis ? Oh well , it’s the great Islamic state active in wars against all in middle east. Faring badly in grabbing customer base and already tight in revenue making, Isis Wallet was struck with lightening when Islamic state of Iraq & Syria rose. Isis Wallet re-branded itself and got a new name ” Softcard”. Already leaking heavy money in day to day operations, re-branding took a toll as it involved a lot of marketing activity.
- Poor marketing tactics – Softcard never disclosed actual data about its reach or number of customers using its app for mobile based payment. It never published any data about its acceptance to pubic. Actually data related to ” who is using it” acts as a opinion maker for crowd. It gives an simple information to customer about what is the trend. People always go by trend. Softcard failed to market its product properly. The confusing mess of device, carrier, credit card, and retail support did nothing to help Softcard.
- Not a solution to problem & No education to customer: Softcard never solved any existing problem rather it was altogether a new domain with lack of consumer education and insufficient incentive. It was tedious as compared to basic card based payments. Apple has recently launched Apple Pay and first step for making it wide spread has been giving proper education to customers regarding the usage of product.
- Lack of Pure tech DNA – Populated with carrier personnel ( Less tech or product oriented and more of service provider DNA) Isis Wallet never had courage to develop a cutting edge, brand new, revolutionary product. It never had a pure tech talent needed for such a product. Organization was dependent on its partners and vendors for any kind of engineering and development. All of this led to a real soft card with no wow factor.
- Controlling the ecosystem: Why Android is a success ? Because Google never tried to force it on the customers. This OS along with a loads of imperfection is still the top choice among costumers. Google has always supported an open approach to this OS and a whole ecosystem has got developed around Android.
- Isis wallet and Trio of Telco’s aimed at controlling secure element, branding and device requirements, but had based the business case on everyone else in the ecosystem blindly embracing this closed model that everyone else was expected to contribute to. No wonder, Isis never made any friends, except the consultants, PR companies and lawyers.
- Better future with Google :The carriers desperately want something that can compete with Apple Pay. With broader availability across most new Android devices and support from all four major carriers, the combined Softcard-Google Wallet service has a better chance to tackle Apple Pay. (There’s still some question about credit card support for Google Wallet, but we’ll pretend that banks will warm up to the idea.) From a marketing standpoint, all the entities here are in a much stronger position.
Softcard Sold. Old Rivals Google and Apple have squared again in fiercest forthcoming battle.
That’s all from FS Labs. Stay tuned for more..
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