Why Amex and Simple See Value in Google Card's Leftovers

The demise of the plastic Google Wallet card may be bad news for Google and anyone who keeps a balance with its digital wallet, but Amex and Simple both see something familiar, and attractive, in the card's audience.

Both companies are offering a $20 incentive to users of the Google Wallet card to open an account with them. Google's plastic card was an appendage of the old Google Wallet payment app, which was replaced by Android Pay last year. Plastic cards were typically seen as "bridge technologies" for digital wallets, enabling spending at merchants that could accept only magstripe card transactions.

These plastic card users may seem to be stuck between two worlds, but Simple and Amex Serve were designed to thrive in that niche. The consumers who signed up for Google's plastic card are the sort of people who were much more interested in Google's software than in the hardware wizardry involved in making contactless payments from a phone, according to Simple.

"These are people who are interested in managing their money on demand," said Amy Dunn, a communications specialist at Simple. "There's a shared mindset between the Google's card users and our users."

Simple was founded as a digital-focused alternative to mainstream bank accounts in the wake of the 2008 financial crisis, though it deposits funds at a partner bank. Simple's product mix includes a Visa-branded debit card and budgeting apps such as "Safe to Spend," which shows people how much money is in their account along with pending charges, as well as online goal-setting tools.

Amex also sees similarities in the target audience that fit well with Serve.

"For us it's about the value that's offered in the card and the cash back offers that would be good for Google Wallet Card customers," said Matt Sollie, vice president of product and business development for alternative payments at American Express.

Amex also offers 1% cash back on Serve purchases. The bonuses will be a large part of the appeal for Google Wallet card users, Sollie said.

"They'll have this money to spend anywhere you're able to use an Amex card," he said, adding consumers will be able to find value with the Amex version of the card that they could not find with the Google Wallet card.

Even if a product such as the Google plastic card isn't profitable, there are certain to be at least a few profitable customers, and the best, most engaged customers are also the mostly likely to transition to an alternative product when the original is shut down, said Rick Oglesby, senior analyst and consultant at Double Diamond Group.

"Amex and Simple also aren't building out new products to support these customers, rather they are looking to transition the customers to existing products so they stand to gain new, profitable customers without a big cost," Oglesby said.

Google launched its plastic debit card in 2013, as part of a range of redesigns and tweaks to its Google Wallet, which suffered from a variety of challenges near the time of its launch. Google Wallet card followed an earlier attempt at a Discover-branded plastic card, which never launched.

After the launch of Android Pay, the Google Wallet app became a strictly person-to-person payment tool, with the plastic card remaining as means of spending any funds received through the app.

Google did did not answer questions about its plastic card, though its website urges customers to choose Simple or Serve as an alternative.