Digital Transactions Authoritative, insightful and timely information for payments professionals
In an example of how fast news can spread in the over heated atmosphere of mobile payments, news items and blog postings appeared on Monday and Tuesday suggesting that Apple Inc. is angling to buy Vivotech Inc., a vendor of hardware and software for contactless payments. At the same time, Google Inc.\'s new investment arm, Google Ventures, unveiled its first 10 investment targets, among them a mobile-payments gateway startup called Corduro, triggering speculation about what the startup could mean to Google\'s strategy in electronic payments.
Mohammad Khan, president and founder of Santa Clara, Calif.-based ViVOtech, refused through a spokesperson to comment on the Apple rumor, a position also taken by two members of the company\'s advisory board contacted by Digital Transactions News. Cupertino, Calif.-based Apple did not return a call seeking comment.
The rumor apparently stems from speculation by a research analyst who spoke to Bloomberg News, an online news service. The analyst based his speculation on the publication last month of a pair of patents Apple had filed with the U.S. Patent & Trademark Office in 2008 that cover mobile payments, including payments involving near-field communication (NFC), an interactive contactless technology in which ViVOtech is heavily involved. ViVOtech already counts two handset makers, through their investment arms, among its investors, Motorola Ventures and Nokia Growth Partners. First Data Corp. and NCR Corp. also hold stakes in the company.
If Apple is making a play for ViVOtech, observers are split on whether the gambit makes sense. On the assumption the computer giant is trying to link its iPhone and other mobile devices more firmly to payments, Todd Ablowitz, a former ViVOtech executive and now a Centennial, Colo.-based payments consultant with Double Diamond Group, argues a deal could benefit Apple by giving it a strong merchant beachhead in NFC, one that would be difficult to acquire otherwise. \”An Apple device has to get integrated [at the point of sale], and that takes years,\” he says. \”It would not be easy for Apple or anybody else.\”
But John Wiese, chief executive of Zenius Solutions Inc., a startup that is working on NFC-based payment solutions (Digital Transactions News, Sept. 9, 2009), says Apple could simply license the technology it needs to get further into payments. \”I don\'t see why they need to acquire a company, unless they don\'t want somebody else to be in the game,\” says Wiese, also a former ViVOtech executive.
While speculation was swirling around Apple and ViVOtech, Google Ventures said it had invested in mobile payments by taking an unspecified stake in Southlake, Texas-based Corduro, which was founded in 2008. The investment arm of Mountain View, Calif.-based Google was formed in March of last year to allow the online search giant to fund promising startups in high tech. It reportedly plans to inject $100 million per year in target companies.
While the investment sparked some speculation that Google would use Corduro\'s technology to bolster its Google Checkout online-payment service, Google Ventures says on its Web site that its purpose with each company is to seek a return on invested cash. Ablowitz, too, downplays the possibility that Google would seek to use Corduro\'s products. \”I\'m not sure I\'d read too much into it,\” he notes. Corduro did not return a call seeking comment.
