Dive Brief:

• Amazon and Google’s moves to make payments smoother and easier are intended to harvest data and make themselves an even bigger part of consumers’ day-to-day existence, according to Laura Kennedy, a senior analyst for the data firm CB Insights who focuses on fintechs.
• The tech giants are accomplishing this through partnerships, and in Google's case, via patents, to insert themselves into the payments space, Kennedy said during a 17-minute presentation posted to the CB Insights website on Sept. 15.
• “They’re really focused on finding ways to embed themselves in transactions to make sure that they are really entrenched with consumers’ lives and able to collect all that consumer data,” she said.

Dive Insight:

Amazon and Google’s moves are all about driving revenue growth, Kennedy said, but people who use these products are also giving the tech companies valuable data.

An Amazon spokesperson did not respond to a message seeking comment.

“Our vision is to help people make simple, secure and seamless digital payments,” a Google spokesperson said in an email.

Big tech’s adventures in the payments space have proceeded in fits and starts, Kennedy said.

“After a decade or more of big tech companies trying to launch their own financial products, many of the major players have now pulled back,” she said.

Apple, for example, dropped its buy now, pay later product earlier this year, and Google scrapped plans to offer bank accounts in 2021. And Facebook parent Meta seemingly walked away from plans to create its own digital currency in 2022.

“They’ve largely shifted to roles as tech providers and they’ve embedded themselves in financial transactions on others’ platforms,” she said.

Amazon has partnered abroad with institutions like the Reserve Bank of India to bring Amazon Pay to the world’s most populous nation, and with the Mexican company Kueski to bring buy now, pay later services to Amazon users in the United States’ southern neighbor.

In the U.S., companies like Meta, Shopify and BigCommerce are using some form of Amazon checkout in their platforms, Kennedy said, citing company announcements and statements from Amazon executives.

“This helps them side-step some of the risk in developing and launching their own fintech solutions,” she said.

Google has its own partnerships, having worked with the health insurance company Humana to add health insurance cards to Google Wallet.

Google’s patents indicate the tech company isn’t finished thrusting itself into consumers' financial lives, Kennedy said. A patent granted to Google in May would enable consumers to send money through social network messaging apps. For example, a user who owes money to a friend could send a message including the amount they owe, then type a symbol to immediately send that money.

Another patent, granted in July, would allow Google customers to pay during a video chat by saying a specific phrase.

These moves also give Amazon and Google access to a valuable commodity: Data.

Some of these services include sensitive information — in the case of Humana, information about a user’s medical conditions — which leads Kennedy to believe the tech companies will proceed carefully in that area.

Instead, Amazon and Google will likely focus on loyalty and rewards programs, which are an easy way to monetize data by encouraging consumers to continue to use Google and Amazon products, she said.

“In May of this year, Google launched a Google Pay feature that highlights how users can win the most rewards from how they spend” which builds customer loyalty and encourages more spending, Kennedy said. She expects to see more features like that as the tech company collects more data.