Quick Take – Google Pay – Relaunch

Google just completed a massive “relaunch” of Google Pay this week. 

Recommend you read either of these 2 articles to get the details. There are 4 key elements in the launch

• Wallet – Now called “Pay”
  1. Stores and manages cards for both eCommerce and Contactless (on android). Not much new here..  My top question here is on tokenization of cards, will get that sorted out next week. 
  2. P2P enhancements… HUGE changes here. The #1 “Pay” feature that Larry has always cared about was P2P.. the global success was Google Tez (in India). Caesar Sengupta is now running Pay from the US.  In Caesar’s words “the [P2P] payment experience is designed around relationships”. As such, P2P is integrated into Gmail, chat, contacts, groups.. It is everywhere! Top unknown surrounds iOS/Apple experience. 
• Explore – What was known as Google Offers plus a new QR code scanning tool
  1. Merchant basket level offers (ie CLO) are a 12 yr old business. Google has put a few key innovations here: consumer experience, activate against any card, cash back and the future hooks for item level offers (ex receipt capture in gmail).  Note that current inventory is 100% partners driven (more below).
  2. Scan bar code. Not only can users do price comparison while in a store, they can also share bar codes. This data obviously informs “intent” and targeted marketing. 
• Insights – Think of this as Mint/Quicken 
  1. Integrated view of spend across both cards and bank accounts (using Plaid). 
  2. This feature seems a tad stunted in functionality right now, but its the core of what Google hopes to receive in consumer permissioned data. This will evolve depending on what data sets are connected and the degree to which consumers consent to data use. 
  3. Insights and Explore should work hand in hand. 
• The PLEX – Not yet live.. But you can register with Citi
  1. As I predicted in August (Google’s Bank Plans), Google has defined a standard partnership arrangement with banks the provides for consumer permissioned data integration. Google is providing a common “UI” and user experience, as well as an acquisition channel. 
  2. Yesterday, I saw only Citi and Stanford Credit union as options. Citi just unveiled what the experience will look like. 

• For bankers reading this .. it is perhaps your best hope at competing with CHIME and other NEO banks. Citi is on board given its small US retail footprint (no cannibalization). Wells, BAC, and JPMC may be more challenged to make sense of this. I find the prospect of earning interest on my checking account quite interesting.. 

Takeaways

1. Google is focused on creating great consumer experiences powered by data. Google recognizes that most consumers have multiple banking relationships, and are acting on the opportunity to deliver value across. Google does NOT want to be a bank, nor will they buy an data aggregator. While Google’s past success in payments can be debated, their success in gaining consumer trust and working with 100% of merchants and adversaries can not. Their unique ability to manage data within a trust relationship will likely power success in Explore and Insights.  
2. Within the US, Google’s success in Pay will likely be driven more by eCommerce than P2P. The US has well established real time P2P systems in Venmo and Zelle. Both of these are now settling on TCH’s RTP. This challenge, combined with low usage of Google Pay by iPhone users will greatly restrict growth. Google faces similar challenges in Asia with Alipay. 
3. Plex will become a tremendous challenger for all Neobanks. The google value proposition and ability to integrate to existing bank accounts will make this a fantastic options for consumers (considering a change). The new Citi product combining savings and checking accounts, and the speed at which accounts become “active” and usable in phone will be a game changer. 
4. Plex will not attract mainline banks for 2-3 years (great WSJ article on business drivers). 
5. Insights. Much work will need to be done to make this a product to compete with MINT. The types of analysis available will likely depend on the degree to which consumers integrate (and permission) card and bank data. 
6. Explore – 100% partners today (offers below). I love this product. Google has an unmatched ability to sell advertisers (and merchants). Consumers migrate to value.. Explore is the heart of value creation… and will be the driver of adoption for iOS consumers. Where PayPal has Honey and the Banks have Cardlytics/DOSH.. This will have a much greater ability to target, and INTEGRATE to marketers existing analysis/spending tools (Google Analytics). No longer will “offer” be managed as a separate stand alone.. 
7. Explore – extension of PLA/Shopping in future. With respect to offers content, In 2011 they built out a 100 person “offers” sales team under Social Gold acquisition. Offers morphed into Offer Ad Extensions in 2014, then to Product Listing Ads (PLA) in 2016.. Now it is Google Shopping Ads and Smart Shopping Campaigns. These take into account a direct merchant data feed for inventory and for item level advertising. Items can now be targeted and promoted across direct and partner channels. I would see GPay’s explore “storing” these for redemption as a “new” last phase option. So for retailers that want to drive to POS or omni channel experience they can direct into google wallet. Importantly, this would also drive merchants to adopt Google Pay merchant (formerly 12 yr old Google checkout) adoption and experience.