As of March 14, 2017, Google, in an announcement, shared the news that users of the Gmail app on Android devices would be able to send or request money with anyone. They would also be able to do so with anyone who did not even have a Gmail address.
Currently available as a feature for the U.S. market only, Google boasted off its “fee-free” new feature on Gmail, wherein, in addition to safely sharing photos and files with anybody over Gmail, users would now also have the provision to share money on the go. The recipient would be able to request or receive money from the app itself, eliminating the need to install another payment app. Further, users can also arrange for money they received to go directly into their bank accounts.
The process is as simple as making a regular attachment to an e-mail. And since the entire process takes place right over Gmail, there is no part that even Google Wallet plays in this regard. Google Wallet, however, continues to remain an option for money transfers online.
It would seem as if Google is now trying to take on payment apps in the like of PayPal or Square Cash with the roll-out of this new in-app payment feature. While the feasibility of making payments over an e-mail communication app is debatable, Google’s move is hardly surprising. There have been several other communication platforms that have ventured into providing users payment options as well. Take for example the case of Snapcash offered by Snapchat, or WeChatPay provided by WeChat, which are slowly making it a mobile payment giant, especially in China.
Google is not new to the whole money-transfer aspect. Google has had money transfer services associated with its products over the web since 2013. We are talking about Google’s 2013 Gmail web feature that allowed users to make payments or money transfers using Google Wallet. But what’s interesting to note, is that so far, Google did not make a move towards payment and money transfer feature for mobile devices. Not only were the money transfer services not heavily adopted, but they were also not as sought after until the ease of money transfer and making payments over mobile devices was noticed.
What Motive Does Google Have This New Move?
As of the year 2016, Gmail has over 1 billion users globally, with over 75% of them accessing Gmail over their mobile devices. Further, Android continues to obscenely dominate the smartphone OS market, holding well over 80% of the global market share as of 2016. With such kind of dominance over the market, there is no doubt that an in-app money transfer service will make money transfers and payments more seamless to some users. However, it begs to question why Google is continuing to provide such services to its users for free.
The increasing penetration of digital wallet is one of the compelling reason behind Google’s active move. In 2016, global consumer mobile payment value was estimated to surpass $3.6 trillion, recording a 20% year over year growth. In 2017, the digital payment value is expected to reach over $4.5 trillion in value. Despite having launched Google Wallet for long, Google is yet to gain a sizable ground in Digital payment space. On the other hand, competitors, including PayPal, Apple and Samsung, have been actively pursuing prospective customers. Though Google had already introduced Android Pay to compete with arch rivals, the company wants to rope in every customer by riding on the back of Android and Gmail success.
Google emphasised in its announcement that the new Gmail feature would be free in all respects, for both parties engaged in a transaction. We can only assume that since the service is presently available only in the United States, Google is hoping to gain some solid ground and expand the service to a few more nations before it charges a fee for it. We also have to remember that Google has to compete with several existing established players in the money transfer space. Providing a money transfer feature in-app over e-mail might be a relatively unique feature for Google, but it may not be able to attract users to its new feature if it charges a fee for it. As of now, until the app feature is rolled out to more countries, our best guess is that the feature will continue to remain free to users.