Google Could Buy Softcard, Pairing Up With The Largest U.S. Wireless Carriers: What Does KBW Think?

According to an article published in the Wall Street Journal last week, Google Inc. GOOG is engaged in exclusive negotiations to acquire Softcard

(formerly known as Isis) -a mobile payments platform jointly owned by

AT&T, Verizon andT-Mobile- for at least $50 million, after the company downsized considerably.

The move seeks to help Google better compete with Apple Inc.’s AAPL  Apple Pay, as Google Wallet continues to struggle for adoption. Research firm KBW weighed in on the matter on Tuesday morning, and below are some highlights from their comments.

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“While Google was one of the early pioneers in the mobile payments space with a fully functioning payments ecosystem, it faced considerable road blocks such as carrier boycotts (due to the telcos monetary interests in Softcard) and lack of merchant acceptance and issuer engagement, which resulted in limited consumer traction. A purchase of Softcard would allow Google access to a handset market previously closed off to its legacy Google Wallet product and would also enable the company to continue some of the progress Softcard has had with engaging issuers and merchants (though engagement from this end is more muted relative to Apple Pay),” the report explained.

But, while Softcard would provide Google with access to higher technology in the payments space, allowing it to ultimately compete with Apple Pay, as mobile payments continue to advance, “there still remains a fair amount of work to be done with Softcard to bring it to a competitive level.”