- Google is planning to start offering checking accounts to consumers starting next year through a partnership with Citi and Stanford Federal Credit Union
Google is planning to start offering checking accounts to consumers starting next year, according to The Wall Street Journal reporters Peter Rudegeair and Liz Hoffman. Internally, this project is known as “Cache.” And Google is going to partner with banks and credit unions for offering the checking accounts. The banks will be handling the financial and compliance regulatory requirements for the accounts.
Google VP of Product Management Caesar Sengupta told The Wall Street Journal that Google will ensure the brand partners have visibility in the marketing of the product. Google plans to offer loyalty rewards through the consumer checking accounts. However, Google is still deciding whether to charge service fees.
Google already runs a couple of financial services like Google Pay and Google Wallet so there will be some integration there. Google Pay is expected to have 100 million global users by 2020.
“Our approach is going to be to partner deeply with banks and the financial system. It may be the slightly longer path, but it’s more sustainable,” said Sengupta via The Wall Street Journal.
Some of Google’s tech rivals in this space include companies like Apple, Robinhood, Acorns, Square, and PayPal. Facebook also launched its own payment service called Facebook Pay earlier this week.
Google is going to be partnering with Citigroup and Stanford Federal Credit Union on this project. The benefit for Citigroup and Stanford Federal Credit Union is that they would be able to attract tech-savvy consumers and they would be able to utilize the insights generated from the Google consumer account to offer products personalized for the future account holders. It’s worth mentioning that Google will not be selling the financial data of its users to advertisers.
Some analysts believe that this project could eventually lead to Google getting into the wealth management business. Over the past few years, several companies have been building micro-investing services and robotics advisors.
“Potentially, if Google got cleared to conduct a brokerage business, they could move in any direction they want,” said Greg O’Gara, senior research analyst of wealth management at Aite Group via Financial Planning. “Cash is a very easy commodity to generate income on and once you attract clients you can cross-sell anything. There really is not much that would stop them from building out a broader investment platform. With the right regulatory oversight, nothing is stopping them.”
Featured image credit: Google
