Last Sunday, October 07, 2012 Google treasurer Brent Callinicos officially announced the launching of Adwords business credit in UK and USA for Small and Medium-Sized Businesses. Google has been pilot testing this Google Adwords credit cards since last July in USA with some selected 1,400+ Adwords users and the participation was invitation only. This is what Google says about this invitation:
Currently, the AdWords Business Credit Card is being offered to select AdWords advertisers.
If you’ve received an offer from Google: You were pre-selected to apply for the AdWords Business Credit Card. Visit http://www.mycardcare.com/AdWordsapplication to apply for the card (the link is also provided in your offer from Google).
If you haven’t received an offer from Google: Thanks for your interest! At this time, this beta program is only available to select advertisers, but we’re working hard to expand the program. You’ll receive an error if you attempt to fill out the application form.
Callinicos tells on the official adwords blog:
Starting today, we’ll invite businesses to use AdWords Business Credit in the UK and extend more invitations in the US later this month. Here are a few details about the cards:
- In the UK, AdWords Business Credit will have a variable 11.9% APR Representative. In the US, AdWords Business Credit will offer an APR as low as 8.99%*, the same rate as in the pilot. Neither card will have annual fees, and they will both have an ample credit limit for AdWords.
- We’re teaming up with Barclaycard, part of the Barclays group, in the UK and Comenity Capital Bank in the US to issue the card. Both are MasterCard cards.
- AdWords Business Credit can only be used for AdWords advertising purchases.
This obviously isn’t open for all and still selective invitations only. The interest rate is simply 8.99% in USA and 11.9% in the UK. Lots of people may get confused with the mention of APR (Annual percentage rate) since there are lots of APR calculations like effective APR, nominal APR, APR representative. But people familiar with loan, mortgage loan, credit card, etc. are familiar with APR. However for US users, Depending on creditworthiness, rates range from 8.99% to 18.99% – says Callinicos.
The monthly credit amount isn’t confirmed but several unverified sources say, Google is offering credit of between $200 and $100,000 a month for Adwords users to pay the adwords bill. Some of the special features of this Google Adwords Business credit card is:
- No annual fees.
- A low, variable 11.9% APR Representative for UK
- A low, variable 8.99% APR Representative for USA
- Can be used only for AdWords advertising.
- No airline mileage with the credit card
- An ample credit limit for AdWords
- Collaborated with Barclaycard in the UK to issue the card.
- Collaborated with Comenity Capital Bank in the US to issue the card.
- The card itself is a MasterCard
- Minimum monthly payments($2)
- 24/7 online support
Google makes 96% of its revenue from advertising, known as Adwords. But Google faces ever rising competition from Microsoft, Yahoo (now an alliance and rebranded as BingAds), e-retail giant Amazon offering credit, rising of facebook ads through social networks, Google’s decision to move to its own line of credit cards to use it’s huge pile of cash reserve and support it’s most vital business (search advertising) is something inevitable. But Callinicos stressed that the main motive for the card was to provide loans to Google customers in an economic environment in which getting credit can be tough.
“It isn’t a financial engineering project that we came up with and said this would be cool to do. It’s a customer need,”
“Obviously we have a robust balance sheet, so this is a way for us to use that balance sheet to help our customers,” Callinicos said.
Francoise Brougher, vice-president of sales and operations for small and medium businesses at Google, said:
“We are helping them, uniquely, with online marketing – we aren’t going into a finance business as Google”,
However, Google’s move is a direct attack to Amazon which has begun issuing loans to independent sellers who offer their products on its marketplace, marking the online retailer’s first move into financial services!
The news of Google’s move to financial activities through offering credit line to customers first surfaced in June 2011. And Google has been testing the feasibility of this venture for last one year and now officially announced it last weekend. Be it in USA or UK, if you haven’t got the invitation, you are out of luck for now.
Here are some useful links for more information:
- Google AdWords Business Credit in UK
- AdWords Business Credit Help FAQ for US users
- “From Google, Credit Cards for Small Business” Posted on BusinessWeek, July 22, 2011.
- “Google Inc is introducing a credit card for its advertising customers, offering its clients a credit line to try and drum up business as competition in the online ad market heats up.” Posted on Reuters, Jul 20, 2011
- What is an APR?