Why is Google Wallet (ex-Google Pay) struggling to establish itself among traditional banks?

Why is Google Wallet (ex-Google Pay) struggling to establish itself among traditional banks?

Almost four years after its launch in France, the Google Pay payment platform, today transformed into Google Wallet, is still far from unanimous with traditional banks that prefer Apple Pay and other solutions. But what is the problem?

Almost 4 years have passed since Google installed its mobile payment system in France and, despite some geographical disparities in the world, we cannot say that it has been successful. This finding stems from several factors, but mostly related to the fact that traditional banks are literally shying away from the service in favor of solutions better anchored in the landscape, like the inevitable Apple Pay.

It must be said that with its various redesigns and its vague positioning against the competition, the American giant still has a long way to go to consolidate itself in its sector. By 2022 in France, payments via mobile solutions now account for nearly 3% of in-store transactions. That may not sound like much, but it’s a 177% increase from the previous year and the number is still rising.

In 2022, only 13 online banks and neobanks support Google Wallet, such as Boursorama Banque, N26, Hello Bank! or Revolution. No traditional bank has yet taken the step. We are going to detail the reasons why Google Wallet is still absent from traditional banks in France.

A platform that changes all the time

First arriving in the United States in 2011 as… google wallet, the platform finally had the same ambitions as today, with one exception. The principle is to be able to store debit, credit, loyalty and even gift cards on your smartphone using the NFC chips of your smartphones to validate them through a compatible terminal. An application that, however, did not yet act as a dematerialized means of payment until the arrival ofAndroid Pay in 2015 with which it was merged to be renamed into Google Pay in 2018, removing digital wallet features in the process. everything has been recently renamed as Google Wallet and unified on a single platform. Are you still ?

In any case, traditional banks have preferred the simpler approach of an Apple Pay despite the fact that Google does not charge any commission for transactions made through its platform.

Google Pay is now Google Wallet: so you can update to the new version of the Android payment app - Crast.net
In 8 years, the platform will have changed its name 4 times with strategic disparities between the brands.

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Google doesn’t communicate about the number of transactions that go through your wallet, just like Apple. Therefore, it is impossible to get an idea of ​​the level of adoption and banks must rely on estimates and their own data. We can decently deduce that if the main French banks have not invested much in Google’s solution, it means that we are far from the expected figures. Especially since they are the ones that bring together the vast majority of bankable customers.

For Google Wallet, it is also a strategic desire on the part of the Mountain View firm, which has preferred since its integration in France to bet on online banks and neobanks, leaving Apple an open field with respect to traditional banks. A strategy that could have paid off if the timing of the launch had been right, as competing services are also well established in this market.

The timing, another element in charge of Google at the strictly hardware level. E-wallets are widely promoted on connected devices and watches that lend themselves perfectly to use. But unfortunately it is not with a disappointing Pixel Watch that came too late to prevail against the Apple Watch and other Galaxy watches at Samsung that Google will gain market share to impose its ecosystem. And even if watch models running Wear OS do support Google Wallet, usage is too rare to be really significant.

The Oppo Watch acts as a means of payment with Google Wallet // Source: Maxime Grosjean for Frandroid

Very little use of e-wallets in France

What if France wasn’t simply too attached to the sacrosanct bank card? In any case, it is a constant that plays on the minds of many banking players in France and the COVID-19 pandemic has changed this habit very little. In addition, contactless payment by card is now much more ingrained in habits. According to the CB observatory, these represent 59% of card payments in shops with 72% of the average basket between 0 and 50 euros. A compelling argument for traditional banking establishments that still see little interest in integrating Google’s solution into their offerings.

Survey conducted in 2021 on the adoption rate of mobile payment in Europe // Source: Statista

On the Internet, the observation is substantially similar, but we noticed slightly different habits with Paypal, which has largely gone off on a tangent on most merchant sites. In addition, with the new measures adopted by banks to combat fraud in online purchases (2FA, instant transfer, etc.), payment by card is still very widespread and Google’s solutions are struggling to convince e-merchants to despite the easy integration of the API.

The competition is already up

If Google was finally a forerunner by launching Google Wallet in 2011, it was largely surpassed by Apple Pay in a field that it had not yet conquered despite its potential. Since 2014, Apple’s payment platform has been successful and has a conversion rate that is unmatched by Google. Appel Pay is much more established in traditional banks and is present in most banking establishments, whether or not they are dematerialized.

Worse yet, Google is being outperformed and even outperformed by other players like Samsung Wallet (formerly Samsung Pay). It enjoys a higher adoption rate on the South Korean brand’s smartphones than Google itself.

The Samsung Wallet page on the Galaxy Store // Source: Frandroid

What future for Google Wallet?

By changing the name and positioning of its platform, Google has understood that it needed to give it an identity beyond a simple means of contactless payment. By going back to its initial concept and integrating the technical advances acquired over the years and combined with the maturity of its Pixel hardware ecosystem, Google Wallet still has the opportunity to impose itself in the coming years in a market that only asks to finally explode. in France.

However, you will have to do your best to convince banks to eventually adopt the platform to reach the largest number of potential customers, otherwise you will settle for a limited audience and confidential success.

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