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Google Wallet is reportedly in talks to buy NFC-based mobile wallet rival Softcard, causing speculation about how the combination might stack up against Apple Pay and other emerging wallet concepts. The rumors surfaced following news that Softcard was shedding 60 employees and consolidating its operations. Softcard’s sale to Google Wallet could fetch between $50 million and $100 million, according to reports in TechCrunch and the Wall Street Journal.

What are the competitive advantages of Google Wallet combined with Softcard, versus Apple Pay, which is a hit with its iPhone 6 user base? Observers note that Android has about 60 percent of the smartphone market, with latent opportunity to expand now that Apple Pay—and the emergence of HCE technology—has rekindled interest in NFC payments at the POS.

The combination makes a lot of sense, according to Rick Oglesby, a senior analyst and consultant with Double Diamond Group. “Operating system owners like Google and Apple are in the best position to make mobile wallets work,” he says, because each company’s operating system is integrated with available mobile apps and smartphone browsers, enabling maximum functionality for mobile wallets. At the same time, Softcard owns mobile wallet carrier relationships, which offer value, Oglesby believes. “Google is in the best position to make an Android mobile wallet work, but Google would benefit greatly from carrier support that could be achieved from buying Softcard.” Executives at Google Wallet and Softcard were not available for comment.

PayBefore, January 20, 2015