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Google Goes Back to the Future With Its Mobile Payments Strategy

Google Goes Back to the Future With Its Mobile Payments Strategy

Google has spent over a decade working to find its footing in mobile payments. It has been a long road characterized by a series of pivots. From early challenges with telcos attempting to box it out of near-field communication (NFC) payments to multiple leadership changes, several rebrands and an abandoned banking initiative, the search giant has been challenged to deliver a consistent strategy and payments offering to the market. At this year’s Google I/O, it announced a return to its original vision of replacing the physical wallet, complete with a resurrection of the Google Wallet brand.

The vision for the new Google Wallet is much like the one the company first shared back in 2011. It will marry NFC payments with other types of credentials, such as driver’s licenses, event tickets, loyalty cards, vaccination cards and transit cards. Essentially, Google Wallet aspires to digitize all types of elements within a physical wallet – a mission we agree with. Somewhat confusing for consumers though, the Google Pay app (first introduced in 2018) will remain as a companion app for Google Wallet in the U.S. and Singapore, and the Google Pay brand will persist at checkout in all markets. In India, where the vendor has seen the greatest success in payments, Google Pay will remain as is, and the Google Wallet app will not be introduced.

While the prospects for a Google Wallet redux remain to be seen, our research indicates that Google has much ground to cover before adoption – and satisfaction – levels are on par with Apple Pay. In a December 2021 survey of approximately 1,600 primarily North American respondents to the 451 Alliance’s Leading Indicator panel, 31% of Android smartphone owners used a digital wallet (online or in-store) at least once over the past 90 days compared with 52% of iPhone owners.

Of Android smartphone owners that used digital wallets, just 34% used Google Pay while 63% deployed PayPal. Of iPhone owners that used digital wallets, 73% used Apple Pay and 45% deployed PayPal. Aside from lower adoption of its wallet within its operating system (as compared with Apple Corp.), Google also trails in user satisfaction – 52% of respondents who tried Google Pay were very satisfied, 20 percentage points lower than the satisfaction rating given to Apple Pay by its users (72%).

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Published by Jordan McKee

Jordan McKee is a Principal Research Analyst for Customer Experience & Commerce, leading the coverage of the payments ecosystem at 451 Research, a part of S&P Global Market Intelligence. He focuses on the digital transformation of the commerce value chain, with an emphasis on the major trends and technologies impacting payment networks, issuing and acquiring banks, payment processors and other payments industry stakeholders. His research helps vendors and enterprises assess and address the implications of the ongoing digitization of the shopping journey. Jordan joined 451 Research with the company's acquisition of Yankee Group in 2013. Before joining 451 Research, he worked at OnProcess Technology, helping telecom and financial services businesses improve their customer experience and service supply chain strategies. Prior to this, he was a member of FM Global's internal market research unit, analyzing trends in the insurance sector. Jordan is listed on the Electronic Transactions Association's Forty Under 40 list for 2018. He is frequently engaged by the media to share his insights on digital payments and has been quoted in the Wall Street Journal, New York Times, Forbes, TIME, Businessweek and The Financial Times. McKee is a regular speaker at client and industry events, delivering keynotes and moderating panels at SXSW, Money20/20 and ETA TRANSACT. Additionally, Jordan is a Forbes fintech contributor and sits on the board of advisors for the Mobile Payments Conference. Jordan holds a bachelor's degree with a concentration in marketing from Bryant University.