Google mulls offering banking
● Google is talking to US banks about offering current accounts to its customers, accelerating Silicon Valley’s incursion into financial services after Apple’s credit-card launch and Facebook’s proposed digital currency libra.
With Facebook running into widespread resistance to libra, Google has said it plans to work with existing financial services providers.
“We’re exploring how we can partner with banks and credit unions in the US to offer smart chequing [transaction] accounts through Google Pay, helping their customers benefit from useful insights and budgeting tools,” a Google spokesperson said.
Like its chief rival, Apple Pay, Google Pay allows smartphones to be used for purchases online and in stores. The Google spokesperson said that its new banking services would maintain “rigorous standards for privacy and user control”.
“We are pleased to explore providing chequing accounts nationwide through Google Pay,” Citigroup said in a statement. “As we do, privacy and transparency are, and will continue to be, critical priorities.”
A Citigroup spokesperson said it would control the banking relationships, and that the accounts would comply with the same regulations as a traditional account.
The features and functions of the Google Pay-linked chequing accounts are still to be determined, the spokesperson said. A model could be its partnership with the messaging service WeChat in Asia, where Citibank customers make payments and complete other everyday banking transactions through the WeChat platform. Google’s new banking effort, code-named Cache, is the company’s latest attempt to crack the personalfinance industry.
It unveiled Google Wallet in 2011 as a way for users to send money to each other. It did not gain traction in the market until the introduction of Google Pay, which has tens of millions of users and is popular in India.
In December last year, Google obtained an e-money licence in Lithuania, enabling it to process payments and offer digital wallets across the EU, and a separate authorisation from Ireland’s central bank under the second Payment Services Directive.
“Our approach is going to be to partner deeply with banks and the financial system,” said Caesar Sengupta, Google’s general manager of payments, in an interview with the Wall Street Journal this week.
Google’s latest plans for financial services come as Alphabet, its parent company, is stepping further into health care, with cloud computing services for the US health provider Ascension and the planned acquisition of fitness tracker pioneer Fitbit.
Many regulators in the US and Europe believe that Google’s tactic of bundling new products with widely used services such as its search engine and Android smartphone software is anti-competitive. The European Commission has fined Google billions of dollars for antitrust actions in recent years after investigations of its search, advertising and Android businesses.