Google launches digital wallet: 5 questions with Payments GM Arnold Goldberg

Google is making a comeback in the payments space, developing its infrastructure to include its first Google Wallet and virtual cards. Tearsheet spoke with the Big Tech’s head of payments, Arnold Goldberg, about what this means for the company. 

Goldberg wants to reimagine how people pay online and in-store, and also what they carry in their wallets. He’s focusing on building world-class consumer experiences across these properties, and creating infrastructure for third parties and integrators. 

In my conversation with Goldberg, there was a strong emphasis on Google’s partnership approach. The Big Tech doesn’t want to go it alone – it wants to be the connective tissue between banks and their customers.

This launch is also a move forward from the scraped Plex project, which was another example of Google's strategy to partner with the existing finance ecosystem. The tech company had teamed up with 11 banks for the project, allowing users to choose which bank they wanted to open an account with. The accounts were to be integrated into its payment platform, Google Pay. 

Google Pay will now be the companion app to the Wallet that people use to pay each other, to save money, and get insights on their finances. This is also a place where Google wants to connect fintechs, neobanks, and traditional banks to their customers in a richer way compared to a container-like wallet. 

Here’s a quick overview of Google’s recent announcements:

Digital wallet:

• In the new Wallet, people can save and access new digital items like vaccine cards, transit and event tickets, boarding and loyalty passes, payment cards, and student IDs from any Android phone. The company is also launching Google Wallet on Wear OS, starting with support for payment cards.

• Google will also integrate this with other apps and services while allowing for granular privacy controls. If a transit card is added to the Wallet, for example, the balance will automatically show up in Google Maps when searching for directions, with the ability to add fare before you arrive at the station. 

• Person-to-person payments are also possible via the Google Pay app, which will be a “companion app” to the Google Wallet. Payment cards can be added to Google Wallet from the Google Pay app. In the countries where Google Pay acted like a wallet, the app will become Google Wallet. 

Virtual cards: 

• Google is adding an additional layer of security to its Auto-Fill feature on Chrome and Android. Online shoppers will be able to convert any card to a Virtual Card Number and shop safely online without sharing the exact card details with merchants. 
• A dynamic CVV will be generated at checkout, eliminating the need for the actual CVV code every time a customer makes a purchase.
• Customers will initially be able to use Virtual Card Numbers to mask Capital One cards, with plans to add support for Visa, American Express, and Mastercard as well.
• Payment information is not used for targeted advertising, the company said.

5 questions with Arnold Goldberg, Google's Payments GM

This marks the first product launch with Arnold Goldberg at the helm – an ex-PayPal executive who joined Google in January this year to build its financial platform. Goldberg had an eight-year stint at PayPal, where he ran its merchant business. 

His recruitment was part of a broader strategy to take a more nuanced approach to financial services and payments, according to Google's president of commerce, Bill Ready.

Tearsheet spoke with Arnold Goldberg about these new developments, and also Google’s strategy going forward in financial services.

This is the first product launch under your leadership – why was this an important first step?

It's great to have a company like Google realize the digital trends currently happening. Everyone rallied around the wallet as an idea that we need to get together to go do. I joined in January, and five months later, we're launching it. This just shows how fast we can move when we're determined. 

I'm really encouraged that it's not just a payments initiative; it's something we're doing with Android and Chrome – each of these has its own individual ecosystem, but magic really happens when we work together.

What are your thoughts around incorporating cryptocurrency into the digital wallet?

We include crypto as a payment option – you add a crypto card to the wallet and can transact with it. But the payment or the transaction is always in fiat currency. Nothing is changing there. We're not changing any of the crypto wallet integrations or the type of transactional enablement that we currently have. 

How is Google pivoting away from the Plex project while still keeping the ethos of becoming a bank technology provider, and building partnerships within the banking industry?

I was at PayPal when the company shifted its perspective on how to engage with the ecosystem. What was previously an adversarial engagement became very collaborative and symbiotic. It didn't happen overnight, but it happened. I think a very similar thing will happen and has been happening at Google – it is an open company, it considers itself an enabler of ecosystems, and doesn't want to do things itself. 

I think that's a big win, because especially in the US, we have to combat what Plex was. We're re-establishing connection with the ecosystem, and I think this announcement will go a long way. 

And to reiterate: we are not a bank, nor do we have any intentions of being a bank. We want to be enablers, providing that connective tissue for our partners to connect with their customers on our platform. 

We will be the platform to connect a neobank, fintech, or classic bank with its customers in a way that only Google can do it. That is the philosophy that we're bringing. And it's not just in payments, it's about the entire e-commerce journey – how can we, at every step of the way, bring an ability and context to connect with the customer in a way that the issuer alone won’t be able to do. That is the way to think about how we will evolve our payment strategy.

Given your experience in the space, have you been able to formulate a vision towards what Google could bring to the financial services space?

We are here as a platform enabler, versus trying to do it ourselves and creating connections to our or mutual consumers with the rest of the payments ecosystem and the commerce ecosystem. 

Our strategy is not just about payments – they are the last piece of a commerce journey. You start with search, but how do you actually get to payments? I think that is where there's amazing opportunities for us as Google, to be at the very beginning of that thought process and commerce journey that finally culminates in a transaction. It's going up at the very top of the funnel and creating value all the way throughout the ecosystem.

What are the biggest challenges in making that happen?

Within Google, there was a real dramatic emphasis on making this happen. But it’s also important to consider the different nuances of what's happening in Europe versus Latin America, and making sure we have the right payment types, making sure we have all the cultural nuances and properly engaging with customers there. 

It's something that we are pretty good at, but I think we really want to make sure we're connecting with customers on the ground. What works in Europe might not work in the US, and having that distinction on what we need to do differently in the product in various regions doesn't change the strategy, it just makes us really listen more. I will enjoy the opportunity to continue the evolution of us as a company and to continue listening to our customers more and more.