Google Is Breaking Into Online Banking With New Checking Accounts. Here's What We Know
Google is unveiling a new product: checking accounts.
Consumer bank accounts from Google will launch sometime next year, according to The Wall Street Journal. The tech giant is partnering with Citigroup and the Stanford Federal Credit Union to manage them.
Google dipping its toe into financial services represents the latest move by a Silicon Valley behemoth trying to capture a slice of the growing online banking marketplace for itself.
The forays into online banking and mobile payments by tech giants haven't all gone smoothly. Apple unveiled the Apple Card earlier this year, and the company and its partner Goldman Sachs faced a recent backlash when customers pointed out that the algorithms responsible for determining a user’s credit limit may be discriminatory. Facebook launched its own payment service called Facebook Pay earlier this week, in addition to continuing to develop its struggling cryptocurrency known as Libra.
People who sign up for Google checking accounts would access them through Google Pay, the company’s digital wallet offering, which is similar to Apple Pay. Google Pay is expected to have 100 global million users by 2020, the Journal says, while Apple Pay had around 140 million users last year.
Google hasn’t decided whether or not its checking accounts would charge users fees, Caesar Sengupta, a Google executive, told the Journal. He did say, however, that the company would not sell users’ financial data.
The project, code-named Cache, has garnered attention from federal regulators who are already worried about myriad issues surrounding big tech. Google is currently facing an anti-trust review by the Justice Department, as well as general concern from Washington and consumers alike that the company has too much power to stifle competitors and collect and profit off of the personal data of users without any real oversight.
While some tech companies are branding their digital banking products with their own name, Google will use the branding of their financial partners and allow the banks to take care of managing the financial operations of the accounts.
“Our approach is going to be to partner deeply with banks and the financial system,” Sengupta told the Journal. "It may be the slightly longer path, but it’s more sustainable.”