Jason Del Rey, @DelRey, of Recode.net (thanks Jason) put out a really interesting article http://on.recode.net/1Bip5X9 on Google and their plans to leverage Gmail as a bill payment platform. Users will be able to receive their bills in Gmail and more importantly pay without need to log-into their biller’s payment ecosystem.
Google would partner with telecoms and utilities and likely credit card companies as well. Gmail users sign up for the new service [named Pony Express], link their payment details and can then begin receiving their bills in one place-a place they already spend a great deal of time.
There have been attempts to do similar things but none had A) The user base of Gmail, B) The massive resources of Google, C) The ability to demand attention from the other requisite players in this space, and D) The brainpower of Google.
This looks like a massive opportunity and a provides Google with a ready target for it’s payments initiatives. This isn’t competing with Apple for mobile payments. I am not sure there is a competitor for this application/service.
Google gains yet another potential massive revenue stream-every bill payment made rings their cash register. The payments industry is attracting massive venture capital for this very reason. If you can get adoption of your payment related application and that application is used repeatedly you have recurring revenue. The software industry has moved to the SAAS model for this very reason; why charge a one-time $900 for a software app when you can collect $49/month for many years?
Oh, and lets not forget about the data. Think about what Google can do when they know where you spend, how much you spend and what you spend it on? One example quickly comes to my mind; I am paying on my 2012 Honda Accord and am on my last 6 months of payments. I may be thinking about a new car. You think Ford would want to be able to target me? I’m sure that Google thinks so. Google ads would compete with FaceBook for the ability to finely tune your audience. I wonder if that was the genesis of the Pony Express idea – How do we get more demographic info for our ad platform? Answer: Tap our 425 million Gmail users.
What a great job: Sit around Google offices and think up new ways to leverage your assets. Sounds very good to me. I am off to buy a few shares of Google.
