Silicon Valley tech giant Google has announced its intention to start offering bank accounts, making it the latest tech big wig to enter the digital banking sector. Google said it plans to partner with banks and credit unions in the US to offer “smart checking” accounts.
“We’re exploring how we can partner with banks and credit unions in the US to offer smart checking accounts through Google Pay, helping their customers benefit from useful insights and budgeting tools, while keeping their money in an FDIC or NCUA-insured account,” a Google spokesperson said.
Codenamed Cache, Google’s digital current account will be for personal payments and bills made through the existing Google Pay app. Users will be able to add the company’s analytic tools to traditional banking tools.
To avoid the need for a banking license and subsequent strict regulations, Google will likely leave the process of handling money in current account apps to traditional banks, according to Google’s Caesar Sengupta.
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Google now joins the ranks of Facebook, Uber, Apple and Amazon in entering world of banking. Apple launched its Apple Card in August while Facebook has just rolled-out its Facebook Pay system.
Apple who worked with Goldman Sachs on the credit card came under fire for sexism after it was revealed men were given higher borrowing restrictions than women. Facebook’s Libra crypocurrency has met with a number of regulation barriers and seen some of its biggest backers abandon it.
Amazon’s credit card and business loans are aimed at augmenting its online retail business, while Uber Money is providing credit cards, debit accounts and money tracking tools to serve the company’s taxi operations.
Speaking to the Wall Street Journal Sengupta said: “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,” adding that the company will not sell financial data from the app.
Google’s move could see it become a new rival to other challenger bank apps such as Monzo and Revolut. Digital-only banks are expected to treble their customer base within 12 months to more than 35 million people, according to a report from Accenture.