Google pockets card payment biz, slips it into Wallet
Token effort - or strategic brainwave?
Google has bought payment processor TxVia to beef up its Wallet offering, putting scalable payment and token management into the Chocolate Factory's hands.
TxVia provides a back-end service for prepaid cards including gift tokens, loyalty schemes and travel cards. It has 100 million customers and links to all the important clearing houses. Google Wallet has apparently been working with TxVia for the last year or so, and has now decided to swallow the company for an undisclosed sum.
Over the last five years, TxVia has raised somewhere in the region of $50m, the last round being in 2010, but it has contacts and experience which Google Wallet desperately needs, and while other electronic-wallet schemes are signing up an ever-increasing range of partners, it is worth remembering that the only really successful example owes that success to its vertical integration.
Felica is the Japanese e-Wallet platform, which is still 38 per cent owned by DoCoMo. The platform includes the payment system EDY, which is run by BitWallet, a company set up by a consortium which included DoCoMo, which can also provide banking and credit-card services, should you so wish.
DoCoMo's weight in the mobile market ensured handset compatibility, and the vertical integration ensured that DoCoMo made its money back.
Outside Japan things are much more fragmented. The operators in most countries are now organising themselves to create standard platforms, upon which payment services from Visa, for exaple – or the (newly announced) ticketing services from Ecebs – will sit. Banks will then be able to offer instances of cards, while train companies offer electronic tickets, and the customer will sit atop the wobbling stack of participants.
All of the participants, of course, believe themselves to be the keystone in the process – and want suitable restitution.
Google's purchase of TxVia ties some of those participants together, and the fact that both the technology and platform are coming from the same place could also provide a firmer footing. If Apple gets into the NFC business then it will be that vertical integration which differentiates it, so Google is perhaps wise to strap together what it can, while it can. ®