Mountain View, California — Global search engine giant Google is embarking into credit card business in the U.K., which enables users to pay for advertising expenditure through Google credit card, and later extending to more businesses in the U.S. a credit card to pay for spending on advertising through its AdWords program, the company said on Sunday.
The move is intended to cater to small businesses when they need to make investments in IT or other operations, and it is often the companies selling them the goods that help with financing solutions.
Now, according to Google, beginning from Monday it is launching a new service in the UK called AdWords Business Credit, to formally give the plastic its name, is a tool the company hopes that small business would use to rack up big bills for online ads when they do not have the cash to stump up for at the time of purchase, Brent Callinicos, Google’s treasurer, told the FT its smaller customers “were not buying AdWords as much as they need to” and that he hopes the credit card will help cash-strapped customers keep their online ad presences at an appropriate level by using the card.
Well, this is not the first time that Google has entered into credit card business in order to drive more AdWords investment — in fact, it has been running a pilot program with 1,400 companies in the U.S. for a year. Before that Google had run special offers giving people credits for more AdWords spend each time they invested in AdWords. This, however, is the first full commercial service of this kind.
Besides, the track record in the U.S. has been pretty encouraging enough to see the company moving to full launches: In a blog post, Callinicos, noted that 74 percent of those in the U.S. pilot now use AdWords Business Credit as their “primary form of AdWords payment.”
Google will be following the UK launch with more invitations to users in the U.S. ahead of a full launch there, as well. The UK launch is being run with Barclaycard in the UK and Comenity Capital Bank in the U.S. — both MasterCard-based cards.
Google says the card’s interest rates in the UK will be variable at 11.9 percent APR Representative, while the U.S. will be at 8.99 percent, as it has been in the pilot. Neither card will have annual fees, Google notes. This is lower than basic credit card rates, but given that the spend on these cards will all be going to Google, it’s a lucrative credit bet for the company. “You can assume we’re not doing this to lose money,” Callinicos said in an interview in the FT. He also noted, though, that this is not seen as a “profit center” for Google in the bigger scheme of things.
But more importantly, the card can only be used to purchase AdWords, although documentation (PDF) for the card contains what appears to be some vestigial terms from other credit cards inasmuch as cash advances are mentioned. Another oddity is a 2.99% “non-sterling transaction fee” that will mean users need to take care when making multi-nation ad purchases.