Fintech watchers say that Amazon and Google are getting more involved in the way we consumers make payments, all with the goal of making things smoother for you—and collecting data to help them grow.
During a recent research webinar – Big Tech in Fintech – Laura Kennedy, a senior analyst at CB Insights, said the two tech giants are teaming up with others and even filing patents to get more involved in our everyday purchases.
In one of three patents Google received, there’s one entitled “Hands-Free Transactions with Voice Recognition” where the patent states that “the merchant computing device may capture a picture of the user using a camera module on the merchant computing device. The merchant computing device may match the picture against a local database of pictures.” Now much more Big Brother do you want than that?
“They’re really focused on embedding themselves in transactions,” said Kennedy, “to make sure they stay deeply connected to our lives and can gather all that data.”
The cookie trail for both Amazon and Google besides gathering information about how you spend your money is to grow their revenue, and payments are a key way to do it. In addition to vacuuming up personal information, Google Wallet, for example, also earns money by charging fees on transactions. And that data is gold for these companies.
Patrick Cooley at PaymentsDive decided to see if both parties would admit what was already pretty apparent. He said an Amazon spokesperson did not respond to a message seeking comment and a Google spokesperson responded to his question by saying, “Our vision is to help people make simple, secure and seamless digital payments.”
Nowhere else to turn?
Big tech’s adventures in the payments space have proceeded in fits and starts, Kennedy said. Apple dropped its "buy now, pay later" service earlier this year, and Google scrapped its plan to offer bank accounts back in 2021.
But those were only temporary roadblocks. Apple went around its hurdle by teaming up with the Reserve Bank of India to bring Amazon Pay to India, and in Mexico, it’s partnering with another company to offer "buy now, pay later" services. In the U.S., companies like Meta and Shopify are using Amazon’s checkout system on their platforms.
“These partnerships help them avoid the risks of developing their own financial products,” said Kennedy.
As part of its own plans to advance, Google is collaborating with Humana to add health insurance cards to Google Wallet. In the Humana scenario, information about a person’s medical conditions would be transmitted – a matter which Kennedy believes tech companies need to be careful about because of the delicate nature of things like someone's health conditions.
(image from CBInsights presentation)
It appears Google’s patent plays aren't over yet. One patent, granted in May, would allow a person who owes money to someone else a way to send them a message including the amount they owe, then type a symbol to instantly send that money.
Amazon and Google will likely add some type of focus on loyalty and rewards programs, which are an easy way to monetize data by encouraging consumers to continue to buy their stuff and use their products.
Kennedy noted that just this past May, Google launched a Google Pay feature that highlights how users can win the most rewards from how they spend, something that would no doubt build customer loyalty and encourage users to spend more. With the company's data collection increasing, she expects to see more features like that.