Google just announced it has been granted a European “electronic money institution license” raising concerns among the more traditional payment community.
The Bank of Lithuania has granted Google Payment Lithuania this license that allows the company to issue and redeem electronic money as well as provide payment services. At the same time, just before Christmas, the Central Bank of Ireland granted authorization to Google Payment Ireland. With these licenses and thanks to SEPA and PSD2 sets of rules, Google is now able to operate payment services, to issue payment means and to accept payments all over the EEA (European Economic Area: EU plus Iceland, Norway and Switzerland).
So far, Google has not been an active player on the European market. The company proposes its Google Pay digital wallet across Europe but has not met a huge success in terms of consumer adoption. Also, one may remember Facebook obtained an e-money license from the Central Bank of Ireland just two years ago.
To be more global, so far, the GAFAM (Google Amazon Facebook Apple Microsoft) have not succeeded in becoming significant players in the payment arena. They have tried different options with Google Pay, Amazon Pay, Apple Pay, Facebook Messenger P2P payments, and even Microsoft Pay, but none of them has built a customer relationship that would compare with the one traditional financial institutions have established with their customers for decades.
If we look towards the Middle Kingdom, the BATX (Baidu Alibaba Tencent Xiaomi) are a lot more successful in establishing payment systems especially with the leader position held by Alipay and WeChat (Tencent).
So, should we be frightened by Google getting an e-money license? Probably not…. Should we be concerned by the expansion of WeChat and Alipay worldwide? Maybe! Undoubtedly, the world change is to come from East Asia….