Why are tech companies going crazy over digital payments?

If oil is black gold then data is digital oil, and companies like Facebook and Google make all of their money by collecting that data. Most of their products are designed specifically to collect data on their users. The products that don’t do this are only there to lure people to the products that do. Once the user data has been collected, it can be sold to the highest bidder or even used by Facebook and Google themselves for whatever purpose, and they’re far from the only companies doing this. Data is quite possibly the most valuable commodity in the developed world and the desire for this commodity is what drives the digital world.

A perfect example would be Google’s latest project, codenamed Pony Express, which was revealed by Re/code after the tech news site managed to get its hands on some leaked Google document. It’s a clever idea, one that I’m actually surprised hasn’t been implemented already. Basically, when you receive an email on Gmail notifying you that you have bills to pay, you usually have to click a link in the email, navigate to a separate website, and pay the bill there. With Pony Express, however, you’ll be able to pay the bill directly from within the email.

As I said, it’s a clever idea, albeit a simple one, that has the potential to make life simpler for millions of people, but what does Google get out of this? It’s not like the company is facing any serious competition in the email provider market, Gmail is already the undisputed leader, so adding new features is nice for users but far from necessary. At least, that’s what it looks like on the surface. When you look deeper, you’ll realize that Pony Express would grant Google access to a wealth of financial data on its users that the company could use in a number of ways, all of which are exceptionally profitable.

Advertisements are Google’s bread and butter and they come in many forms. I’m not just talking about the banner ads or YouTube ads that most of us probably use AdBlock to remove anyway, I’m talking about paid recommendations. Whenever you search for something on Google, be it to look up a historical figure or check if your favorite sushi joint is still open, Google is injecting ads from companies that pay a lot of money into your search results. The more data that Google has on you, the better it can target these ads. This means you’re more likely to click on them, which means the ads are more valuable, which means Google can sell them at a higher price.

Just like Google isn’t the only company harvesting user data, it’s not the only one with an interest in digital payments either. In fact, it looks like digital payments are the next battlefield for tech companies. Apple’s entrance into and subsequent domination of the mobile payments market has caused competitors such as Microsoft and Samsung to scramble to release their own mobile payments services while long-time participants in the market, such as Google and Softcard, have been forced to rework their existing products.

Messaging apps have been delving into the realm of mobile payments as well, especially Asian apps such as China’s WeChat and Japan’s Line. Both of these companies have been trying to turn their apps into the digital equivalent of a Swiss Army knife, with mobile payments being the primary focus. In the United States, apps like Snapchat have made it easier for users to share money with each other and more are following suit, such as Facebook, which has released its own money transfer feature for its Messenger app.