Is Google Pay a bank-killer app?

Google has relaunched the Google Pay app. The new app, allows consumers and businesses to send and receive money. In the case of individuals, they can send money to anyone on their phone contact list, and businesses can accept payments with just their name or a QR code. Most importantly, the new version of Google Pay allows us to do all this without having to purchase any additional hardware and doesn’t depend on payments being made through via a card terminal. As Daniel Döderlein writes at Forbes: “The difference from the old Google Pay is massive, not only in features and focus, but in the effects it will have on the market.”

He illustrates the difference the new Google Pay will make when compared with, say, a system like Apple Pay. He says, “If Company A serves consumers with a payment tool, such as an app on a device that can hold a card they serve the consumer side.” This is because the merchants need to have hardware to accept a payment. This model limits Company A to using existing networks such as Visa and Mastercard. The old Google Pay used this NFC wallet model, which is called ‘one-sided’.

Google has now shifted its focus away from NFC wallets and made a decision to go ‘two-sided’. This flies in the face of the received wisdom coming from the major card issuers. “The card industry, with Visa and MasterCard at the helm, has spent billions on telling the world that NFC is the best thing since sliced bread and that contactless payments will rule the world,” Döderlein writes, adding that while tapping your card on a card terminal might seem amazing, it’s hardly “mind blowing.” Consumer expectations are rising, and the physical store-bound hardware-based payment scenario is becoming outdated. Döderlein argues, “you can’t ignore the fact that people browse, explore, interact with and shop on their phone, often miles away from the merchant.”

People want payment methods to be even easier and more streamlined. They may want to buy and pay for something on their phone, and then collect it at the store. Removing the card payment hardware from the equation makes that possible.

This is what Google is aware of, although it is by no means the first. “AliPay, Venmo, Zelle, Swish, Mobilepay and a handful of others around the world have already reached more than 1.5 billion users based on this model,” Döderlein reminds us. He added, “The new Google Pay is a bank killer and it also brings a huge stab to the card networks on its path.”

The new Google Pay is a two-sided, proprietary mobile payment network that will address its clients directly, both consumers and merchants, rather than through a partnership with a bank, for example. This could make a big dent in the existing card payment network businesses, because payments will be pulled from a person’s account without the card networks being involved.

It will certainly affect the banks, traditional and challenger. Having a bank account was the main way to obtain a debit or credit card, now Google Pay makes it unnecessary to carry that card around with you.

The model has already been proved to work in China with AliPay and in the Nordic countries it has made payment networks bigger than that of cards.

Google clearly knows it will have a fight on its hands with the card networks, but its willingness to go forward with it, indicates that it is looking to the long term. And as Döderlein says, “it means business.”

There will be a number of losers in the banking world, but the winners are merchants and consumers. Real mobile payments are on their way and that’s a winner for all of us.

Google spanks naughty app developers

If you have an app on the Google Play Store, and that app provides for in-app purchases, watch out, because the Big G is coming after you.

Currently, under Google’s rules, if you provide in-app purchases, you must use the Google Play Store’s billing services, which basically means that Google keeps around 30% of your revenue.

This is nothing new. It has always been the case. However, a number of developers have decided to ignore this rule and Google is not pleased. So, it plans to reinforce it. Apple is taking similar measures, so the news for developers is not good.

In response, a coalition of app publishers, such as Spotify, Epic Games and Basecamp, “have announced the creation of the “Coalition for App Fairness,” which hopes to more fair arrangements between app stores and publishers,” Johan Moreno reports. The new organization formalises efforts the companies already have underway that focus on either forcing app store providers to change their policies, or ultimately forcing the app stores into regulation. You can find out more on the coalition’s website, where the group details its key issues, including anti-competitive practices, such as the app stores’ 30% commission structure, and the inability to distribute software to billions of Apple devices through any other means but the App Store. The group sees this as an affront to personal freedom.

They just happen to be some of the developers that have been thwarting Google’s fee rule, according to Bloomberg. They have managed to do this, “by mandating that users sign up for services (and pay) through the app’s website, which avoids the need for in-app purchases.”

The problem for Google is Android’s open nature. It allows users to download third-party apps, whereas Apple has a closed app ecosystem. As Moreno says, “on some Android devices, there may be a third-party app store, operating completely without the guidance of Google.”

App developers may continue to circumvent Google by creating and popularising, “a third-party app marketplace that can be loaded onto Android that may provide more fair terms for developers.”

Who Will Kill Bitcoin?

We are apparently living in an unprecedented time, although of course we aren’t; there have been plagues before this one. The only difference is that we are living through this is in an age of technology.

We know who the global tech giants are:They are Google, Facebook and Apple, and they all need to build their revenue. Amazon is excluded from the list, because it has already seen a massive growth in traffic and purchases, as consumers confined to their homes need to have stuff delivered.

 

One way in which the three tech giants could pursue rapid growth is by entering the financial services sector, something they have dipped their toes into, but have never embraced wholeheartedly. However, they face a challenge, and as Billy Bambrough, one of the expert cryptocurrency analysts I follow writes, while Google et al have been waiting around, “bitcoin has gained ground.”

What are Google and Facebook’s weak points?

 

As Bambrough says, these two companies have relied on ad revenue, but he believes that this is going to be squeezed hard by regulators in the post-virus world. In an earlier article, he wrote that the world will likely be looking for alternatives, and quotes the CEO of the blockchain-based privacy browser Brave, who believes Google “is going to be taken apart over coming years.”

Apple loses its grip

 

Apple has seen sales of its big money maker, the iPhone, decline. The reason being that less expensive phones have improved in quality, and improvements to the iPhone have not proved to be enough to really enthuse the consumer. Add to this the economic effects of the coming global recession and it is easy to see that those who might once have splashed out nearly $1000 on a new iPhne, may opt, indeed will have to opt, for cheaper models that effectively do the same job.

Google is apparently looking into launching a smart debit card, and Apple has already debuted a credit card, while Facebook is still moving ahead with its Libra stablecoin project that caused such a stir last year. It hoped to displace bitcoin as a leading cryptocurrency, but has clearly been foiled in its efforts.

 

Bitcoin offers stability

Meanwhile bitcoin, which has no tech company, government or central bank behind it lives on. And as Bambrough points out, it doesn’t even have an advertising budget, never mind a CEO. As he says, “Bitcoin, maintained by an evolving and decentralized network and beholden only to the mathematical principles that underpin it, is stability without authority.”

 

Google et al by contrast are deeply centralised, and so will any financial products they unleash on the market. They will never get away from that, whereas bitcoin continues to represent the antithesis of Silicon Valley capitalism. That’s why the big tech companies main option now is to kill it! But who will do it?

How Google’s 5G strategy could give it market dominance

Google has shared its vision for enabling telecommunication providers to deliver business services through 5G networks using a Global Mobile Edge Cloud (GMEC) strategy. This will allow both Google and telecoms companies to use 5G networks to deliver “unique applications and services running at the edge,” as Janikaram MSV writes at Forbes.

What is 5G/Edge for business?

A 5G network will be able to deliver speed and bandwidth unlike anything we have experienced before, and the entire system is more geared up for business services than consumers. Furthermore, since telco networks provide access to the Cloud, it means they can “introduce an edge computing layer that offers unique advantages to businesses,” Janikaram says.

Google foresees the advantages of this for its own business, because it will enable it to provide some of the best Google Cloud Platform capabilities to the businesses, and this in turn will enable the telecom companies to monetise their 5G networks.

Google has already partnered with AT&T to build a portfolio of 5G edge computing solutions ​for industries like retail, manufacturing and transportation​, and will maximise the use of Google’s AI capabilities to help AT&T to expand its reach in the USA.

Consumers will also have their experience radically offered when through the use of 5G. It will deliver all manner of immersive experiences using augmented and virtual reality, and we can expect the retail sector to be altered beyond recognition with services similar to an Amazon Go shopping experience, and we’ll have ‘smart’ everything: cities, healthcare, buildings.

All of this depends heavily on using Artificial Intelligence (AI) and data. Google is well positioned for this as a leader in analytics, as well as AI, and its strategy will help telecom providers to offer a “technology stack to developers and businesses building the next-generation consumer experiences.”

For example, here are some of Google’s assets that will help it to make the most of the edge computing opportunity: Anthos is a Google modular hybrid cloud platform based on containers and Kubernetes for enterprise data that can be revamped for the telecom edge.

And there is TensorFlow, the most popular open source machine learning framework used by researchers, AI engineers and ML developers.

Google has also built custom hardware to accelerate the training and inference of machine learning models, and its Edge TPU is the counterpart of Cloud TPU that can speed up inferencing TensorFlow models running at the edge.

Let’s not forget that Google has 21 cloud regions and 134+ Content Delivery Network (CDN) locations across the globe, and that through its Point of Presence (PoP) and edge locations, Google delivers some of its services such as Search, Gmail, YouTube and more. It is going to capitalise on this global footprint, and as Janikaram says, “If Google manages to deliver on its vision of edge computing, it will become a formidable player in the 5G-based mobile edge computing market.”