Google has added another feather to its hat and is all prepared to enter consumer banking in the year 2020. The company is currently working on a plan codenamed ‘Cache’ which would offer checking accounts to its consumers, according to The Wall Street Journal as summarised below.
The service would basically be provided through the Google Pay app (launched in 2018 for hassle-free online payments), but the accounts will reside with a few US banks for now. The current bank partners include the Citigroup Inc. and Stanford Federal Credit Union which is affiliated to the University of Stanford. The accounts will be labelled according to the banks they belong to. In the world of digital payments, Google is already quite accomplished with its digital wallet Google pay which currently has 55 million users worldwide. Users are predicted to be 100 million by the year 2020. Google Pay would be the key portal through which the consumer will manage their accounts.
This strategy is also significant for the investors. While the Citigroup Bank is the largest national bank in terms of deposits and assets, it has a much smaller network than those of its top rivals. A partnership with Google would increase the outreach network significantly. “We have to be where our customers are,” said Anand Selva, head of US consumer banking, Citigroup.
Google pay too has a number of rivals like Apple pay which has 383 million users currently and Samsung pay, the South Korean giant which is also expected to reach 100 million users in 2020. Facebook also is planning to roll out its own digital payment service called Facebook Pay. This would initially be available to the users of Facebook, Messenger, WhatsApp, and Instagram which in itself would cover a heavy population of people. Well, who doesn’t use WhatsApp or doesn’t have a Facebook or Instagram ID! Payments for Facebook would be processed by PayPal and Stripe with advanced security, anti-fraud provision, and privacy protection.
Google is certainly a big tech player and has competitors’ eyes on its foray of entering the banking sector. Serious concerns regarding the financial security and privacy of the users by the ‘threatened’ established competitors in the banking sector are bound to rise.
In an interview, a Google official said that the approach would be to partner deeply with banks and the financial system. The process might be slightly longer but it would be sustainable in the long run. He also informed that google would partner with more banks in the future.