The days of writing a check to pay your gas and electric bill are quickly coming to a close. Some two-thirds of all bills were paid electronically in 2012, a 20% increase from five years earlier, and, according to financial services technology provider Fiserv, 27 million households now pay at least one bill from their phone.
It's not surprising then that Google (NASDAQ:GOOG) (NASDAQ:GOOGL) smells an opportunity and is reportedly planning to launch a new bill payment service inside its Gmail email platform that builds on the Google Wallet pairing it did in 2013, allowing users to send money to friends and family via email.
The check is in the mail
Re/Code reports that the new service has been dubbed Pony Express and will roll out in the fourth quarter this year. Re/Code said it had seen a document on the service, but that a Google spokeswoman declined to comment. According to Re/Code's report, all a Gmail user would have to do is turn over to third-party vendors for authentication their personal information, including name, address, Social Security number, and possibly even full credit card numbers.
After a user was verified, they'd be able to receive in their inboxes electronic statements from billers and then have the option to pay them right from within the email system.
As Re/code points out, Pony Express wouldn't be the first service to try to create a central hub for collecting, organizing, and paying bills -- Intuit bought Check last year for $360 million to allow it to build on its Mint personal finance service -- but with more than 425 million active Gmail users and 500 million active accounts, Google has a readily available base of customers to quickly dominate the niche.
That is if it can get over the hurdle of having people turn over sensitive information to make the process work.
While security breaches at companies like Target and Home Depot have shaken consumer confidence in the ability of corporations to protect their personal data, and the theft of documents from Sony that ultimately led to its co-chairman resigning shows the vulnerability of corporate email systems, Google hasn't won accolades either for instilling trust in its ability to maintain privacy.
While it may not have as bad a reputation as Facebook in violating boundaries of trust bestowed on it by users, Google has engaged in a series of missteps that calls into question how closely it hews to its own privacy protection policies. Over the years Google has:
- Collected identifiable data about users over unencrypted Wi-Fi networks for three years.
- Engaged in deceptive privacy practices when it launched Google Buzz, leading the FTC to fine it $22.5 million, force implementation of a comprehensive overhaul to protect consumer data, and submit to 20 years of agency auditing.
- Required "real names" to access its Google+ social network, a policy it only belatedly abandoned last year.
- Developed, then shelved (temporarily, anyway) its Google Glass project, that many saw as invasive to those around the wearer.
And then there was the brouhaha over Google's scanning your emails to allegedly search for spam, though it says Gmail users should have no "reasonable expectation" of privacy in the confidentiality of their emails.
Personal data is big business
The value in collecting and compiling so much user-specific information -- which the Pony Express bill pay service as reported would expand exponentially -- is that Google can sell the data to advertisers across its various platforms, such as AdSense ads based on your search history that appear as you visit sites or watch YouTube videos.
Its success, however, could turn on whether younger generations of Internet users feel comfortable giving up sensitive information to third parties.
While conventional wisdom suggests so-called millennials -- those born between 1980 and 2000 -- have a more cavalier attitude about privacy on the Internet, a 2010 Pew Research Center survey found 44% of young adults limit the amount of personal information available about them online and 71% of 18-29-year-olds on social networks changed their profile privacy settings to limit what could be seen online.
Still, two-thirds of millennials already use their smartphones to pay bills and the growth of mobile payments -- whether it's an individual app like the one Starbucks uses, or the more connected Apple Pay network from Apple -- seems to make an email payment service a logical extension. With the average age of a Gmail user being 31 years old, this would seemingly be a natural fit for Google.
You've got mail
It already laid the groundwork with the ability to send and receive money via email by connecting its Google Wallet service to Gmail, which was a component of a larger strategy to make Google Wallet-based services beyond POS payments even more ubiquitous.
Although it would seem the explosion in privacy and data breaches would make people more leery of giving up personal information to a serial abuser such as Google, so ubiquitous are its services that many may not even give it a second thought. And that could make the Pony Express a privacy disaster waiting to happen.