Google Closes Google Wallet Debit Cards To Cut Costs

Google announced to shut down its Google Wallet debit cards from June 30 to increase its profitability

Amidst an effort made across the company to end money-losing businesses, Google is closing down its Google Wallet debit card, the company confirmed by posting in a blog on March 31, 2016.

The debit card, which is connected to user’s Google Wallet account balance, launched two years ago for people to purchase in stores and provide data regarding their offline purchases to the company.

Sources aware of the product spoke to Quartz that many active cards are available and the search company informed customers that such products are provided by a digital bank, which is owned by prepaid unit of the credit card service provider, American Express Serve and Spanish bank BBVA.

The debit card will be formally closed on June 30. The company refused to share views apart from the post. The shutdown has come as Alphabet concentrated on cutting costs in its comparatively less profitable units. The US organization appointed Ruth Porat as CFO in May last year, and according to reports of Wall Street Journal in July, the former CFO of Morgan Stanley was heading internal auditing to cut down the non-revenue earning fat of Google.

In 2013, former executives told the organization’s peer-to-peer payment service is losing money on every transaction due to the high charges paid to credit card service providers. The service was initially aimed to users to make payments in stores via Android devices, but that role was split into another service known as Android Pay, which was launched 2 years ago after Apple introduced its mobile wallet, Apple Pay.

Google wallet is current concentrated on peer-to-peer payments service, which has a little traction. According to Tech Crunch, people who are Wallet Card holders would not be able to deposit money into it after May 1, and the cards (and recurring transfers) will be abandoned on June 30.

Android Pay will also not be accepting payments made through Wallet Cards. The decision by Google to turn its service into a peer-to-peer payments technology (which allows its users to transfer money to one another by entering their phone number or email address) indicates it is quite aligned with the trends witnessed in the digital payments industry. It also competes with many other such services including Snapcash, Venmo, Square Cash, and PayPal.me.

The search organization has announced to re-design its Wallet app and include new features “in the coming months” while remaining in the profitable region.