Google Inc (GOOG – Analyst Report) recently unveiled a prepaid debit card. This card will enable consumers to purchase goods at stores and to withdraw cash from ATM machines. This card will be available to Google Wallet users free of cost and be acceptable at places that generally accept Mastercard. Cardholders will not be charged any monthly or annual fees.
The debit card will enable consumers to access the funds stored in their Google Wallet accounts. Google Wallet is a smartphone app and online payment service that lets consumers buy goods and transfer money.
The introduction of this card implies that a phone is no longer essential to make payment at stores. Instead customers can directly swipe their cards at POS (point of sale) terminals to make the necessary payments.
The newly launched prepaid debit card is expected to play a major role in Google’s expansion into the world of commerce. It should also provide valuable information about the shopping habits of consumers that can be used, in turn, to target ads.
Google is a market leader in online advertising and it has been trying to explore various ways to diversify its revenues and fight competition. Google continues to acquire smaller companies with specialized technology to boost its different offerings. In Feb 2013, it acquired Channel Intelligence for $125 million to boost its e-commerce business. Earlier this year, it acquired an infrastructure startup company, Talaria Technologies, to boost its cloud offerings. Google also acquired a mobile mapping and navigation company – Waze Inc. – for about $1.1 billion.
Google reported gross revenue of $14.89 billion in the third quarter of 2013, up 5.6% on a year-over-year basis. The company has expressed its intention to increase investment in its core products in the future.
Currently, Google has a Zacks Rank #3 (Hold). Facebook Inc (FB – Analyst Report), AOL Inc (AOL – Snapshot Report) and Microchip Technology Inc (MCHP – Analyst Report), all with a Zacks Rank # 2 (Buy) offer attractive investment options.