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

Nearly four years after its launch in France, payment platform Google Pay, which has turned into Google Wallet today, is still far from unanimous with traditional banks favoring Apple Pay and other solutions. But what is the problem?

It has now been almost 4 years since Google created the mobile payment system in France, and despite some geographical disparities in the world, we can’t say it has been a success. This finding stems from various factors, but above all related to the fact that traditional banks literally eschew service in favor of solutions that are better anchored in the landscape, such as the inevitable Apple Pay.

It must be said that with its various redesigns and its ambiguous position in the face of competition, the American giant still has a long way to go to establish itself in its sector. In 2022 in France, payments via mobile solutions now account for approximately 3% of in-store transactions. It may not sound like much, but it’s up 177% from the previous year and the number continues to rise.

In 2022, only 13 new online banks and banks are compatible with Google Wallet, such as Boursorama Banque, N26 and Hello Bank! or revolution. No traditional bank has made a landing yet. Let’s explain in detail the reasons why Google Wallet continues to be absent from traditional banks in France.

Platform changes all the time

It first arrived in the US in 2011 as… google walletThe platform eventually had the same ambitions as it does today, with one exception. The principle is to be able to store debit, credit, loyalty and even gift cards in your smartphone using the NFC chips of your smartphones for validation via a compatible terminal. The application, however, has not yet functioned as an intangible payment method until the arrival ofAndroid Pay in 2015 which have been merged to be renamed Google Pay in 2018, The functionality of the digital wallet is removed in the process. everything was It was recently rebranded as Google Wallet and unified in one platform. are you tracking?

In any case, traditional banks have preferred the simpler approach to Apple Pay despite the fact that Google does not collect any commission on transactions made through its platform.

Google will

Google does not communicate about the number of transactions that go through its wallet, just like Apple. So it is impossible to get an idea of ​​the level of adoption and banks must rely on estimates and their own data. We can reasonably conclude that if the major French banks have not invested significantly in a Google solution, then we are far from the expected numbers. Especially since they are the ones who collect the vast majority of eligible clients for financing.

As for Google Wallet, it is also a strategic desire on the part of the Mountain View company, which since its merger in France has preferred to bet on online and new banks, leaving the field open to Apple in relation to traditional banks. A strategy that could have paid off if the release was timed right, as competing services are already well established in this market as well.

Timing, another element that Google takes on a strictly hardware level. E-wallets are widely promoted on connected devices and watches whose use is quite convenient. But unfortunately it’s not with the disappointing Pixel Watch that arrived too late to impose itself against the Apple Watch and other Galaxy watches at Samsung that Google will gain market share to enforce its ecosystem. And even if Wear OS watch models are compatible with Google Wallet, the use is still too rare to really matter.

Oppo Watch works as payment with Google Wallet // Source: Maxime Grosjean for Frandroid

Low use of e-wallets in France

And what if France is not simply so attached to the sacred bank card? In any case, it is a constant that plays in the minds of many banking players in France and the COVID-19 pandemic has changed this habit quite a bit. In addition, payment by card is now more firmly established in the habits. According to CB Monitor, these represent 59% of in-store card payments with 72% of the average basket being between €0 and €50. A big argument for traditional banking institutions that still see little interest in integrating a Google solution into their offerings.

On the Internet, the note is quite similar, but we notice slightly different habits with Paypal, which greatly affected the majority of merchant sites. In addition, with new measures taken by banks to combat online purchase fraud (2FA, instant transfer, etc.), card payments are still widespread and Google’s solutions are struggling to impress e-merchants despite the ease of API integration.

The competition is already above

If Google eventually pioneered with the launch of Google Wallet in 2011, it was largely outperformed by Apple Pay in a field it has yet to conquer despite its potential. Since 2014, Apple’s payment platform has enjoyed success and an unparalleled conversion rate at Google. Appel Pay is more implemented in traditional banks and is present in the majority of banking institutions, whether they are dematerialized or not.

Even worse, Google has been and even overtaken by other players such as Samsung Wallet (formerly Samsung Pay). It has a higher adoption rate on smartphones from a South Korean brand than Google itself.

What is the future for Google Wallet?

By changing its platform name and location, Google realized that it needed to give identity beyond simple means of contactless payment. By returning to its initial concept while integrating the technical advancements gained over the years and integrating them with the maturity of the Pixel hardware ecosystem, Google Wallet still has a chance to assert itself in the coming years in a market that is only asking to finally explode in France.

However, he will have to do his best to convince the banks to finally adopt the platform to reach the most potential customers, otherwise he will be satisfied with a limited audience and secret success.

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