Google to launch credit card; PayPal to move offline
21 July 2011 | 18515 views | 1
Non-bank competition in the payments market is set to hot up as Google launches its own credit card and PayPal expands on its bricks-and-mortar strategy.
Google is preparing beta tests of a commercial credit card which will be issued to cash-strapped small businesses in an effort to encourage ad spending.
The AdWords Business credit card promises a competitive interest rate of 8.99% and no annual fee with the sole proviso that it can only be used for spending on Internet advertising over the search engine.
Brent Callinicos, Google's treasurer, told Reuters that the credit card will be offered to a "statistically significant" number of people as Google examines the results of how availability of the card affects customer spending behavior.
"Even though (availability) will skew toward the smaller businesses, obviously we want to cast a wide enough net so we can see what resonates depending on your historical monthly spend," said Callinicos.
EBay's PayPal unit meanwhile - which has just turned in its first $1 billion quarter - has lined up trials of a point-of-sale system with a major US retailer, and plans to have up to 20 retailers operating the service during 2012.
Referring to the initiative during a quarterly earnings call with analysts, eBay CEO John Donahoe, said: "We're in a strong position in online payments to expand to point of sale. We intend to help retailers grow offline in the same way we helped merchants grow online."
In the UK, Paypal has already set up an integrated POS system with restaurant chain Pizza Express, through which customers can pay for their bills via an iPhone app.