Will Google be your new credit card?
By Mike Moran. Filed in e-Commerce, Monthly Newsletter |Tags: American Express, credit card, Google, Larry Page, Mastercard, PayPal, VISA, Wallet
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Mastercard and VISA certainly hope not, but Larry Page wants to be in your wallet. Well, not exactly–he wants to replace your wallet. Last month, when I talked about Google’s new strategy–we do everything–I mentioned that Google is working hard to unseat PayPal, the online payments leader, but I think that I undersold Google’s ambitions. Google wants to be the leading form of payments anywhere, not just online.
So, how might they do that? Let me count the ways:
- Near Field Communication (NFC) was in the Google phone and Google wants Android support for NFC chips to give it a leg up on using your phone to pay for things in physical stores. Who wouldn’t want to wave their phone at the cash register and be on their way?
- Google Wallet is stalking eBay’s PayPal to take a piece out of the online payment market. eBay sued Google within hours of the Google Wallet announcement, so don’t think this will be a quiet fight.
Well, that wasn’t hard to count, right? Doesn’t sound too threatening–I mean MasterCard is even a partner on Google Wallet.
Well, look a bit closer. What is really going on here is that these are just a couple more data points in the Google orchestra of data. Google has Google Analytics and Google Checkout and Google Search and a dozen other properties that all work together to find out more and more about what people are buying and where.
What would stop Google from analyzing all these shopping patterns and launching Goo-pon? By looking at all this behavioral data, Google could provide shopping savings that we could all like: saving money without the hassle. In fact, Google’s recent purchase of ITA must have sent shudders through the ranks of Travelocity and Expedia. Google is doing the same thing they do. Why couldn’t Google use all of the data they have collected to offer any discounts they want, because they know the price point to pitch each one? Information wins this game.
But information isn’t all that is needed. One area where NFC still lags is security. Reports of physical security being hacked (if you walk by someone, they might be able to charge your phone) and the different legal status of NFC–a fraudulent charge on your credit card won’t cost more than $50 in the U.S. by law–might both be impediments to wary consumers adopting NFC. Remember how long it took for consumers to be willing to enter credit card numbers online? There were far fewer real dangers there than for NFC.
So let’s return to the original question. Google wants to be your new credit card because it is its new source of growth. They’ll start with the easy stuff, but don’t be surprised if they are working to remove the middle-man at some point. Because Google doesn’t suffer its partners for very long.
Sunday, December 4th 2011 at 7:15 pm |
Great piece, Mike, and spot on, as always. If you’ll pardon the shameless plug, see my piece about FairSearch.org and Google. Expedia, Travelocity, TripAdvisor, Kayak and Microsoft are backing the group, who’ve pushed heavily to get further oversight into Google’s business practices from an antitrust perspective (they’re definitely on to something, though I find FairSearch’s tactics highly questionable). At any rate, you’re exactly right that Google is seeking loads more information—and that their competition is causing shudders throughout the industries affected by those acquisitions.
Sunday, December 4th 2011 at 7:16 pm |
Sorry. That’s supposed to be “…their activity is causing shudders,” not “…their competition is causing shudders.”