While Google came to market quickly on the heels of ApplePay with its own GooglePay and digital wallet products, the tech giant has been mostly quiet in the fintech space. Google, a subsidiary of parent Alphabet Inc., has been working quietly for several years to build its digital wallet offering into a full-featured digital banking platform to be called Plex. After striking deals with 11 banking partners for the launch, Google pulled the plug on the Plex product in October of last year and pushed the reset button on its fintech strategy.
Google announced yesterday that former PayPal executive Arnold Goldberg has joined the company to run its payments division and set a new strategy course for the business. Bill Ready, former PayPal COO, joined Google in 2019 and took over the payments business in 2020, becoming the President of Commerce in 2021 and recruiting Goldberg to head up the payments and emerging market efforts. Industry observers have long expected Google to be a disruptor in financial services, but Google lags behind key competitors in driving financial products, not even offering its own co-branded credit card.
In announcing the addition of Goldberg to the team, Ready also indicated that a strategy shift is underway to refocus Google’s fintech efforts in a way that builds Google into a connectivity layer for the entire consumer banking and finance industry, not just a few select partners.
“We’re not a bank — we have no intention of being a bank,” Ready said in an interview. “Some past efforts, at times, would unwittingly wade into those spaces. Our aim is to help create connections, we’re not a conflicted party.”
Google launched its payment app in 2015, and recently shared that it has 150 million active users globally, but it faces stiff competition for other digital wallets, including one operated by Samsung on its native Android devices. Industry analyst Tom Noyes estimated that Google accounted for just 4% of contactless payments in the U.S. in 2020, calling the service “largely a failure.”
Nonetheless, Google has an enormous global user base and very strong balance sheet to leverage as it works to expand and enhance its digital wallet capabilities. Ready says that the product overhaul will focus on making Google into a “comprehensive digital wallet” that will enable consumers to track financial and non-financial data like travel tickets and vaccine passports. Google is also tightening the integration of its wallet with its platform, enabling features such as showing loyalty rewards and eligible discounts directly in shopping search results.
“Helping more activity occur on a free and open web — that naturally pays dividends to our overall business,” Ready said.
Overview by Don Apgar, Director, Merchant Services Advisory Practice at Mercator Advisory Group
