Word surfaced on the weekend that Google is working on plans to introduce a smart debit card to the marketplace to complement its Google Pay service.
From Apple Pay, Twitter co-founder Jack Dorsey’s Stripe, and Google Pay, Silicon Valley has been targeting the financial/fintech sector for several years. While Google is not releasing details, some information has leaked out about their plans for a smart debit card which edges them closer to providing a mix of banking services.
In November last year, Google and Citibank were working on a personal checking account to go alive this year. The timing could be out the window because of coronavirus, but the news about a Google smart debit card to compete with Apple/Goldman Sachs digital credit card.
What would Google’s smart debit card look like?
While the Apple digital credit card operates like most other credit cards, Google’s debit card would be issued through a personal checking account and not offered as a line of credit.
Debit card users would use an app similar to Apple Wallet to make contactless purchases, check balances, manage and monitor spending, and lock down a lost card while still enabling digital purchases. A virtual card on a mobile phone could be used for Bluetooth-enabled purchases and the digital card number useful for in-app purchases or online payments.
At the moment, Google Pay only allows online and peer-to-peer payments using a standard payment card.
Viable strategy for Google?
A Google spokesperson told the Wall Street Journal last November, “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.”
A Google debit card could allow the company to open up new potential revenue channels, not to mention new sources of valuable data and perhaps extending into robo-financial advice, investment services, lending, and insurance.
Some analysts see potential for the move by Google. Apple Pay now accounts for 5% of global card transactions and Bernstein Research projects Apple will handle 10% of global payments by 2025.
Patricia Hewitt, principal at PG Research & Advisory Services LLC in Savannah, Ga says, “Google has figured out they’ve to get a card out into the market. That’s a must-have for them. So many transactions still take place in the physical space.”
Other industry watchers are not so sure given the intense competition in the fintech sector. Sarah Grotta of Mercator Advisory Group says the features are already available by many competitors. “At the end of the day, what appears to be different about this card is the Google brand and marketing,” she told Digital Transactions News.
With COVID-19 still raging across the US and around the world, there may not be an immediate demand for a Google smart debit card, but a longer-term banking services strategy still seems to make sense for the Silicon Valley giant.
Visuals courtesy of TechCrunch
LET’S CONNECT