Digital Marketing & Sales

New payment strategy from Google, here comes Google Pay

Google officially launched Google Pay, a new comprehensive payment service enabling users to make payments online, within applications, contactless payments in stores, and transfer money to other people in p2p mode. Users can perform these operations with credit cards or through bank accounts entered when registering their Google account.

But the real news is not about services offered by Google (all of which were already possible) but the rebranding and consolidation of payment systems mentioned previously. Several payment systems of the Mountain View company have in fact been absorbed in Google Pay, including Android Pay and Google Wallet. Released in 2011 as NFC Mobile payment system, over the last few years Google Wallet has enabled to transfer money in p2p mode. The Android Pay brand was created in 2015 as a Google Wallet spin-off when Google decided to promote and extend NFC at worldwide level, now present in 17 Countries. Additionally, the American giant entered the online payment market last October with the launch of “Pay with Google”.

The decision to consolidate the different systems into one – the opposite of what was done in 2015 with the release of Android Pay – with an intuitive and easily recognizable brand could have many reasons, all of which are the result of a new and stronger marketing strategy.

One of these, for example, could be aiming to fill the gap between Android Pay and its main competitors Apple Pay and Samsung Pay: Google’s service is the least used within their respective user segments. In fact, according to a combined Pymnts-Infoscout survey, in the United States only 11% of potential users tried it, compared to 14% of Samsung Pay and 25% of Apple Pay; usage level is rated at 1.7% against 3% and 5.7% of Samsung Pay and Apple Pay. Furthermore, at worldwide level – but this also depends on the number of Countries in which the service has been launched – Android Pay appears to be behind its competitors: according to Juniper Research estimates, Android Pay users are 24 million, compared to 34 mil of Samsung Pay (in 22 Countries) and 87 mil of Apple Pay (in 20 Countries).

Another reason could be related to the intention of extending its p2p services, currently available only in the United States, UK and India (under the name Tez), to all Countries that have already launched NFC services. Additionally, the marketing synergies between the two services, p2p and NFC, can be leveraged by Google in future launches and can help to “educate” those who are using only one of these two services.

Finally, the coexistence of different solutions could create confusion among users and frustrate their user experience, because even though the provider has not changed they are still obliged to have non-linear payment experiences and to manage different applications and accounts.

by Ivano Asaro and Matteo Risi, Mobile Payment & Commerce Observatory

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