Google's mobile wallet has gone through several iterations, but the most recent — Google Pay — signals a significant turning point for the company's mobile wallet strategy.
As always, Google's strength is search. This gives the company a unique edge as it expands its mobile wallet strategy to include multiple rival brands. This starts with PayPal, which Google Pay plans to include as a funding option, and is fueled by Google Pay's integration throughout the tech giant's ecosystem. By incorporating rival brands, Google can make its wallet app a de facto search tool for finding the right mobile wallet for any particular retailer, website or in-app purchase.
To further this plan, Google has shed its role as a gatekeeper. The original Google Wallet, which launched in 2011, failed to attract more than a single bank partner because of the stringent requirements Google had in place at the product's launch. It took a fundamental shift in technology to bring more issuers on board, but it also left Google with fractured ecosystem that it struggled to unify.
The next iteration, Android Pay, was a streamlined product designed to shed the complexity that Google Wallet built up over the years. Its branding echoed that of Apple, which is notoriously controlling of its ecosystem. Google Pay is less a response to Apple and more an embrace of open development and open banking.
With online payments providers Braintree and Stripe setting the stage for embedding one-click payments into e-commerce stream, it has become clear that Google needs to be a part of that market in all of the channels where Google's Chrome and Android ecosystems are active.
"We have been monitoring Google Pay closely because many of our clients have taken different approaches to advance it or promote it," said Richard Crone, chief executive of San Carlos, Calif.-based payments consulting firm Crone Consulting LLC. "This time around, they are really emphasizing the channel development, because channel sales is the key in payments."
The company famous for its search engine capabilities is making far more noise with Google Pay than it did with Google Wallet or Android Pay. It could be argued that Google launched Google Wallet far too early; any advantage it gained by starting first was squandered by betting on the wrong path for the development of the mobile wallet market.
On the other hand, Android Pay may have come a bit too late, ceding ground to the likes of Apple Pay and Samsung Pay, the latter of which encroaches on Google's ecosystem by running on Samsung-branded Android handsets.
But the mobile channel is just one front in this war. Google's Chrome browser has hundreds of millions of users, including an audience on Apple devices. Chrome isn't necessarily thought of as a mobile-only brand, so emphasizing Google Pay's functionality there gives Google access to a market that may not have considered it otherwise.
"It may start online for Google Pay and others, but it goes everywhere," Crone said. "You can't do order ahead and pay, or purchase and pickup in a store without first embedding payment, and you can't order an Uber or Lyft ride without first embedding payment."
Bank support was an area in which Google stubbed its toe with Google Wallet. This time, banks are more aware of how a mobile wallet operates and how it resonates with its customers.
In fact, Google has made it clear that it cherishes partnerships with card issuers as much as any other deal it can strike at this time. As such, it was not surprising that Google announced last month it had added 176 banks to support Google Pay. Such progress would be unheard of in the Google ecosystem just a few years ago.
Google took a wise approach from the start with Google Pay, which debuted on Feb. 20, to be available through not only Google's platforms but also for other services, such as a P2P option to compete with Venmo, Zelle or Apple Cash.
After all, when Android Pay was introduced in the summer of 2015 as the successor to Google Wallet, it streamlined the platform by severing the P2P payments option, which remained under the aging Google Wallet brand.
But the market had changed dramatically with the various P2P offerings and a growing gig economy, prompting Google to quickly bring P2P functionality back when it launched Google Pay.
The evolution didn't end there. Knowing that Apple was making Apple Pay available through its desktop browsers, Google expanded Google Pay's operability through desktop browsers and iOS devices. Consumers who saved their payment credentials to Google Pay could now use their account across other browsers such as Safari and Firefox regardless of the device they were using.
At the same time, Google formed a partnership with Eventbrite to enable consumers to use Google Pay to accept event tickets and airline boarding passes. Companies in the entertainment and travel industries would have the option to add the Google Pay API to their apps.
Early last month, it was becoming clear that Google wanted its mobile wallet to be part of the mobile ticketing and boarding pass world, making note of this market during its annual conference for app developers.
In keeping pace with the other wallets on the market, Google Pay is also operating through wearable devices the company rebrands its Android Wear platform as Wear OS.
Google does not reveal its user numbers for its various services, but any revelation in that area would likely show Google Pay has significant work ahead of it.
In its independent research of active users in the U.S., or those that make at least two transactions per month, Crone Consulting estimates that Google Pay has about 15 million users. By comparison, Apple Pay has about 40 million, Walmart Pay 24 million, and Samsung Pay about 11 million.
To Google, the message is clear: To catch up to its rivals, it has to be open to working with more of them.
Kate Fitzgerald contributed to this article.