MasterCard Profits from Google Wallet
The launch of Google Wallet is benefiting more than just Google. It’s putting money onto MasterCard’s income statement, too.
The Google Wallet is a digital substitute for an actual wallet, storing all your credit, debit and gift cards. It is backed by MasterCard, which means it is treated like any other MasterCard when a consumer taps their phone to the MasterCard PayPass terminal to make a payment.
Every time you use a credit card at a retail establishment, that store is charged a fee for accepting it. That is called the swipe or interchange fee. A certain amount of that fee goes to the card issuing bank, the retailer’s merchant account provider and the credit card processing company. Thus, every time you pay with your Google Wallet, MasterCard makes money.
This happens no matter how the funds arrive to your Google Wallet. You may use a Visa or Discover card to put funds into your Google Wallet account, but MasterCard is going to be profiting by its use.
The Google Wallet app still has an assortment of hurdles to overcome before it grows to the level of popularity Google wants it to reach. At the very least, it puts one more feather in the cap of MasterCard in their never-ending battle with Visa.