What Google's Prepaid Card Means for You

Prepaid cards typically bring up images of high-fee products designed to make banks money. But Google  (NASDAQ: GOOGL  ) recently introduced a new prepaid card, and it could transform the industry.

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, talks about the Google card and why it's different from many of its peers. He notes that the tech giant is trying to promote its Google Wallet with the card, and it's willing to go without charging any fees of its own in order to encourage the card's use. That continues a trend that American Express  (NYSE: AXP  ) and Wal-Mart  (NYSE: WMT  ) started with their Bluebird card, which was among the first mainstream prepaid cards to offer reasonable fees. Meanwhile, Dan points out, Walgreen  (NASDAQ: WBA  ) and other companies continue to release cards with higher fees. Yet they all have the common goal of driving business toward the issuer's other products.

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  • Report this Comment On November 29, 2013, at 10:47 PM, Gridlocked wrote:

    Dan you may have missed the fact that Google's new card doesn't have free ATM access. They don't charge a fee but you'll pay to access an ATM. Adding money via debit or credit card costs 2.9%.

    Amex Serve - free ATM access

    GoBank - free ATM access

    Amex Serve - add money via debit or credit card 0%

    More to the point Google coming out with a physical card is an admission of failure for the phone wallet.

  • Report this Comment On December 02, 2013, at 3:24 PM, woogler wrote:

    Amex Serve only has free ATM access at Moneypass ATM's, so not as free and open as you make it sound. Also, Mastercard is accepted by more merchants than Amex. A lot of places will not process Amex because their fees are too high.

    Google Wallet is free to send funds too if using a checking account.

    Most pre-paids you can also load up over the phone using an existing account or at the nearest Wal-Mart Money Center with cash. GW does not have this ability, therefore:

    I do not believe the intent of the GWC is to compete with other pre-paids, rather to gather spending data for more targeted ads. Furthermore, it is not a failure when a firm meets demand. Demand is not there for OTA payments yet, so this is a stop gap with the purpose of driving more people to OTA and sooner. That is why you may see some future development with GW such as: mobile deposit/check capture, direct deposit (you can ACH into and out of GW after all), overdraft protection/backup funding, etc.

    If Google insourced processing then the above tasks would become immensely more feasible and obvious, and make Big G a mega financial contender. They already offer a touchless POS with First Data, and are trying to make it popular along with mobile POS for merchants.

    Google just wants to know more about you, because data is their bottom line, that is why they are such a valuable advertising platform. To that end, they are trying to ingrain themselves into the fabric of society. I believe this one of their next big steps.

    Just my .02

  • Report this Comment On December 02, 2013, at 3:31 PM, woogler wrote:

    The only real difference between the PayPal Debit MC and the Google Wallet Debit MC is:

    1. PayPal started sooner

    2. PayPal has it's own (and the world's largest) eMarketplace - eBay

    3. Nifty feature set such as Check Capture & a some lines of credit (Smart Connect, PayPal Credit MC)

    How G overcomes:

    1. Time and marketing (read $, so pretty easy)

    2. Develop Google Shopping as a real competitor to eBay and overtake them.

    3. Add said features

    So as we can see, nothing too monumental, the groundwork for all this is there already.

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