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Softcard, the mobile-payments venture of Verizon Wireless, AT&T Mobility and T-Mobile USA, has laid of 60 employees in a restructuring, according to media reports. The layoffs raise questions about the future of Softcard, formerly known as Isis, which has had trouble gaining consumer and merchant acceptance for its near-field communication-based (NFC) service in a fast-changing mobile-payments market.
Silicon Valley news service re/code reported Friday that the 60 employees represented 12% to 30% of the company’s workforce based on a staff-size range disclosed on its LinkedIn site. “Softcard is taking steps to reduce costs and strengthen its business,” the company said in a statement. “This includes simplifying the company’s organizational structure and consolidating all operations into its Dallas and New York offices, which involves layoffs across the company. We believe these efficiencies will best position Softcard in the marketplace while maintaining focus on serving our market.”
As a private company, Softcard does not disclose its employee count, but “in general the employee base is in the hundreds,” the company said in an email to Digital Transactions News.
Mobile-payments analyst Rick Oglesby of Centennial, Colo.-based Double Diamond Payments Research says by email that the layoffs mean “that the carriers are pulling out. It was a high-risk venture from the start, one that would require very firm commitment to be successful. Downsizing is a clear indicator that the commitment is no longer there, and this is not a venture that can succeed without very strong commitment from its investors.”
First announced in 2010, Softcard, then known as Isis, struggled to gain issuer partners and merchants that could accept its contactless mobile-payment technology. Last year, the company dropped the Isis name and rebranded as Softcard in order to avoid any association with a violent militant group, one of whose names was Isis, that had taken over large swaths of Iraq and Syria. Powerful new competition appeared in October with Apple Inc.’s launch of its NFC-based Apple Pay service for the new iPhone 6 and 6 Plus and the pending Apple Watch.
Softcard did score a win late in October when it announced that consumers could use the service to pay with smart phones at most of McDonald’s Corp.’s 14,000 U.S. locations.
