Big tech in finance – why Google could be launching a debit card
- Google is reported to be developing a debit card of its own
- Streams of data from payments and transactions can fuel consumer insights
- Meanwhile, Apple Pay is set in motion to account for 10 percent of global transactions by 2024
There have been reports that Google is developing its own debit card – a payment method that could rival that of Apple Pay – as a growing list of tech giants dip their toes into the finance sector.
The finance industry is lucrative and tech companies are all too aware that they can win a large chunk of it with innovative and strategic new services that level-up current offerings in a still majorly ‘traditional’ industry that has been slow to digitize compared to other sectors.
Apple Pay, for example, currently accounts for a sizable 5 percent of global card transactions and is set to reach 10 percent by 2024.
The digital payments sphere represents about US$1 trillion in revenue globally with key players Visa and MasterCard responsible for processing more than US$14 trillion payments annually. This is an immense market that Google has set its sight on.
As reported by TechCrunch, the news of a possible Google debit card in the making sparks speculation into how the search giant would leverage the resource, and where it would fit into its wider business.
How would it fare with other services?
It’s predicted that a Google Pay card would offer the fundamental functions of a virtual payment card and the physical card would be used to link a bank account with the Google Pay app.
“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,” a spokesperson for Google told TechCrunch.
“Our lead partners today are Citi and Stanford Federal Credit Union, and we look forward to sharing more details in the coming months.”
The introduction of a debit card would likely help the search giant tap into new data streams that can be used to power Google Ads and consolidate new business models in the fintech landscape.
Alongside data sourced from the digital realm through its search engine and video streaming platform, a trove of data that holds insights on consumer behavior remains in physical transactions themselves. The untapped avenue reveals consumer’s reception towards marketing strategies and seasonal trends, which fits Google’s interest and can help advance its existing services.
By becoming part of the payment ecosystem, Google can access consumer data to bolster its online advertising platform business.
Deriving valuable insights from payment transactions, the tech giant gains additional insights and increased accuracy to improve targeting and, in turn, enhance ad campaign measurement.
Even though the card policy may prevent third-party entities from accessing consumer data, it does not stop Google from tapping into it.
As compared to Apple, which debuted its payment card last August backed by Goldman Sachs and Microsoft’s recent rebrand of its Office 365 to include finance functions, Google is a relative late-comer to the world of finance.
Moreover, one of Apple Pay’s recent developments is biometric technology to minimize human contact in payment — a function many will find useful and essential amid a pandemic — meaning users can use their faces or fingerprints to authenticate transactions.
With all that in mind, introducing a debit card wouldn’t be beyond the pale for Google, but the data it would glean from transactions at scale could be some of the most valuable data it holds on consumers.
30 November 2023