Brief:

• Google is developing a physical and virtual debit card that would give consumers more flexibility in making payments at places that aren’t equipped with contactless payments. The card would connect with the Google app, letting people see their purchases, check balances or lock their accounts, TechCrunch reported, citing leaked photos and information from anonymous sources.
• Google will co-brand the card with issuers such as Citibank and Stanford Federal Credit Union, though its exact name still hasn’t been disclosed. The leaked photos suggest that the card would be on Visa’s payment network, though it may support processors like Mastercard, TechCrunch reported.
• The card also would have a virtual version for Bluetooth mobile payments, and a virtual card number for online or in-app payments. Security features would include a PIN or fingerprint scanner on mobile devices, TechCrunch reported.

Insight:

TechCrunch’s reporting on Google’s payment card indicates that the search giant is getting more serious about developing its own debit card that would make its payment platform more versatile. One of the biggest impediments to the adoption of mobile payments has been consumer habit with card payments, especially in developed markets like the U.S. Unlike urban parts of China that leapfrogged into cashless transactions, the U.S. has a well-established payments infrastructure for card payments that make point-of-sale transactions easier.

Google has struggled to gain wider adoption for its payments platform, in part because use cases are limited to peer-to-peer and online payments. Users can also load debit cards from other providers onto Google Pay. A Google debit card would open the platform to more seamless customer experiences for in-store payments and comes amid speculation that the coronavirus pandemic could open the door to broader adoption of mobile payments overall as consumers and retailers look to reduce the need to handle cash or touch point-of-sale terminals. 

Contactless payments are expected to boost their share of transactions at stores and ATMs by 10 to 20 percentage points because of the coronavirus, per an estimate by mobile payment research firm Crone Consulting cited by Bloomberg News.

Google, Apple and Samsung all continue to place bets that mobile payments will be a cornerstone of the mobile experience eventually. Faced with limited adoption of Apple Pay, the iPhone maker last year issued its first physical credit card in a collaboration with Goldman Sachs as an issuing bank and Mastercard as the processor.

There are contradictory indications of how popular Apple Pay has become since its introduction in 2014. Apple Pay usage peaked in late 2017 and has declined to about 5.1% of eligible transactions, per a PYMNTS.com report this month. Despite such low adoption rates, about 93% of all iPhones can use mobile wallets, the study found. The report follows a study by eMarketer that indicated Apple Pay overtook Starbucks, a pioneer in mobile payments at its locations, as the most popular mobile payment method.