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There's a bit of sleight of hand going on here, in that it seems to be a Mastercard prepaid card in the phone which just charges your transactions to other card
by mpclark 14y ago
There's a bit of sleight of hand going on here, in that it seems to be a Mastercard prepaid card in the phone which just charges your transactions to other cards you have on file with Google. So you don't pay the retailer with Amex, you pay with MasterCard and the charge eventually lands on your Amex. This makes it a bit like PayPal, but we already know that PayPal prefers to draw money from your bank account rather than your credit card because it is cheaper. It will be interesting to understand how the fees are structured around all of this because it seems to me there could be 2x friction in play...
- andrewpi 14y agoIt's possible that Google is getting a percentage of the transaction fee that is paid by the merchant when the 'virtual' Google Wallet Mastercard is used, and then applying that money to the transaction fee that they have to pay to charge your American Express, etc.
- ben1040 14y agoI wonder how this plays in with chargebacks & consumer protection from cards. If Google's partner bank is a proxy between the merchant and, say, your Amex, what happens if you need to invoke a chargeback? Does Google's partner get involved and push back against Amex?