Its amazing how Google has tried doing so much in Payments, will they get some tailwind finally?

Never Settling, Experimentative Google drawing big in payments space

Google has taken several steps into the Money and Commerce space during the past several years, with its Google Wallet app serving as the main vehicle. Recently, Google unveiled a new version of the mobile payments app that completes itself with a new user interface. Google has done some lesser known acquisitions in the past such as:

  • In July, 2011 Google acquired Punchd (a digital loyalty card startup) for $10mto tie it with Google Wallet.With the Punchd acquisition, Google is looking to solve the customer adoption problem of mobile wallet technology.
  • In April 2012 Google acquired TxVia, a mobile payments technology company, to complement Google Wallet’s core offering, by adding additional features and the ability to scale up rapidly. TxVia had relationships with all the major payment networks, and in all, it manages some 100m accounts.

Payment services offered by Google and other related dynamics

  • Google Checkout (June 2006)
  • Google Wallet (May 2011)
  • NFC Payment Card (May 2012)
  • Google Play Gift Card (August 2012)
  • Google Glass Payments (October 2013)
  • Host Card Emulation (November 2013)

Google Checkout was an online payment processing service provided by Google aimed at simplifying the process of paying for online purchases. It was designed to make online shopping easier. Google Checkout provided fraud protection and a unified page for tracking purchases and their status. Google Checkout was discontinued in November 2013. The product was aimed at taking on eBay’s PayPal service, which dominates Web-based payments. It was free for merchants until February 1, 2008. From then until May 5, 2009 Google charged US merchants 2.0% plus $0.20 per transaction, and UK merchants 1.4% + £0.20.

In 2006 eBay, which owns PayPal, added Google Checkout to its banned payment methods list, forbidding the use of Google Checkout to pay for eBay transactions. As of June, 2011 eBay forbids the use of any external checkout system to pay for eBay transactions.

In November 2011 Google merged its online payments service Checkout with mobile payments system Google Wallet, and the company released its first app version for android phones. The service works with the 300,000 plus MasterCard PayPass merchant locations. A new feature in Google Wallet for both Android and iOS lets shoppers track where their goods are, right inside the app. Over the last couple of years Google expanded the scope of wallet to include loyalty, offers, storing several cards, discounts and other features to make it a holistic Payments and Commerce offering.

In September 2013, Google launched digital wallet app on iPhone to compete with Apple's Passbook. They also added features like loyalty cards, money transfer, coupons, and offers to the app.

In November 2013, Google rolled out a physical debit card linked to its digital wallet service that allows users to buy goods at stores or withdraw cash from ATM machines. Users can also link a bank account or credit or debit card to add funds to their Google Wallet card. Why a physical payment card? while it has its mobile transactions platform? Doing so, would allow consumers to make purchases with their Google Wallet accounts at merchants that do not support near field communications.

Google had also come up with a feature wherein a user could send money over email by just attaching it to the email. The receiver may or may not be using Gmail to accept money. The receiver will have to log in to Google Wallet to receive money (deposit to a bank account) or pay for goods and services which accept transactions over Google Wallet.

Also Read Host Card Emulation versus Mifare, most widely used contactless payment technology worldwide

Currently, the Google Wallet app is only available in the US; however outside of the US, users can use Google Wallet online to make purchases on Google Play in over 125 countries, and at online merchants in over 160 countries and territories.

In May 2012, Google launched a new payment card, called Beba, for consumers in Kenya. The card makes payments over NFC

Google Play Gift Cards were launched in August 2012. The vouchers can be utilized for a number of functions such as purchasing new games, apps, movies, books, magazines and music via Google Play.

Google is also trying to enable payments through any connected device (IOT) and one of its latest innovation is – Pay with Google Glass. To cash in on this innovation called Google Glass, financial institutions, payment app makers, start-ups are lining up to be amongst the first few to offer real payments via Google Glass. Some of the companies who are coming up with new offerings or tweaking their existing offerings to work with Google Glass include Intuit, Mastercard, and RedBottle Design (The Company from California, has come up with an app called GlassPay.). There are some European banks as well that are gearing up. Google Gear solution should expedite the payments through connected devices.

Around November 2013, with the release of Android 4.4, Google introduced a new platform support for secure NFC-based transactions through Host Card Emulation (HCE), for payments, loyalty programs, card access, transit passes, and other custom services. With HCE, any app on an Android 4.4 device can emulate an NFC smart card, letting users tap to initiate transactions with an app of their choice. Apps can also use a new Reader Mode so as to act as readers for HCE cards and other NFC-based transactions. This basically also circumvents issues with carriers - bypassing the secure element.

Google is continuously doing innovations in the non-cash payments space to expand its offerings, and is adding new and exciting features to its wallet services. It has still to see some measurable success from the above initiatives. Google requires some tailwind to boost merchant and customer adoption of its payments services. Host Card Emulation could be one such key to the kingdom. HCE is just brilliant!

Also Read Apple has a handful of patents in the area of NFC, will iPhone 6 with NFC impact payments with it?