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Google making a progressive move in payment industry
Google is revisiting its idea of launching a smart debit card after a hiatus of almost five years. Google Wallet had a debit card on offer in 2014, but it was withdrawn in 2016 by the company. Google is now working again on a debit card powered by Google Pay, reports Techcrunch. It seems with the world becoming more accustomed to digital payments and the pandemic changing the way people will operate post the crisis; Google is rethinking this concept.
TechCrunch has got access to some images of a virtual and physical debit card that Google is developing. The card will be associated with a checking account, and one can use it for purchases online, or by mobile phones. It connects to a Google app with new features that let users easily monitor purchases, check their balance or lock their account.
Google plans to partner with some banks for co-branding, such as Citibank and the Stanford Credit Union. It may extend its associations with other banks at a future date. Google wants the card to be associated with its Google Pay app similar to what Apple Pay and Apple Card do. At present, GooglePay only allows peer to peer transfers and online transfers associated with a physical bank card.
The smart card could open up a new stream of revenue for Google by charging on usage and checking account fees along with its partner banks.
Along with that, it would be collecting reams of data on the purchase behavior of its users, which again can be used for target advertising. Google ads can be placed at relevant spaces to drive sales for advertisers. It can charge for such data sharing. The world is slowly becoming totally digitized, and with the pandemic driving people more towards a contactless society, the role of technology is going to be very insidious in the future.
For giant tech companies like Google, it makes sense to get into financial services, which has tremendous potential to advance into a bundle of products and advisory fintech services for its vast audiences. Along with a payment gateway and checking account, the offerings could move into brokerage services, banking and financial advisory too.
Google’s access to vast amounts of data and presence in almost every aspect of everyday life through its apps and engines, gives it tremendous opportunities to connect with people. Google has yet to confirm its foray into a debit card, but in reply to a query from The Wall Street Journal, it said, “We’re exploring how we can partner with banks and credit unions in the US to offer smart checking accounts through Google Pay, helping their customers benefit from useful insights and budgeting tools while keeping their money in an FDIC or NCUA-insured account. Our lead partners today are Citi and Stanford Federal Credit Union, and we look forward to sharing more details in the coming months.”
The TechCrunch report doesn’t mention when Google plans to launch the debit card. Most Americans own 2.6 credit cards on average, says research. But they generally have only one checking account associated with the cards. Getting people to open another checking account and that too on Google, which is very pervasive and raises questions of security, will be a tad difficult. Whether you want to stay up-to-date on the latest business news, read in-depth CEO interviews, or find new ideas on leadership, management and innovation, Industry Leaders Magazine is here to suit your needs and help you stay more informed.