Google Wallet Likely to Hurt Subscription Retention, Skype Avoids Pre-Paid Problems With Its Own Cards

Google seemed to have jumped the gun this week when it announced Google Wallet supports all major credit and debit cards. American Express was

Google seemed to have jumped the gun this week when it announced Google Wallet supports all major credit and debit cards. American Express was quick to announce there was no formal deal, according to CardNotPresent.com.But even with a formal deal, subscription sites should be hesitant to use the new cloud-based service. Amex’s biggest concern is the fact that purchases show up on a cardholder’s statement as “Google” instead of with normal merchant-related information. That means that Google is effectively eradicating best practices in payment processing, like having the merchant’s website and a customer service number show up on statements in order to reduce customer cancels and chargebacks.In other news, voice-over IP provider Skype just issued its own prepaid cards in Mexico. Our sister site Subscription Site Insider has warned about pre-paid cards; they can be notoriously difficult for recurring billing since customers can forget to re-fill their cards or get a new one.

But Skype’s own branded cards may be a smart solution. There are two cards — one pay-as-you-go card for 150 pesos and a “subscription” card with unlimited calling for 100 pesos a month. The “subscription” card is a bit of a misnomer as it has to be re-bought every month, so it’s more of an unlimited monthly card.But unlike most pre-paid cards, customers are required to have a Skype account before they can use one of the Skype cards. This allows Skype to retain customer email addresses and market to them through their own free Skype services, even if a customer fails to pay for the next month of service.And since Skype can track customer usage (and the cards can’t be used for any other purchases), the company will have a crystal clear picture of how much money is left on pay-as-you-go cards and when monthly cards are up for renewal. It can then easily remind customers to buy a new card before their cards expire.

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