Google is set to expand its influence into financial services in 2020 by offering checking accounts through a partnership with Citi and Stanford Federal Credit Union.
Google has yet to follow Apple’s lead in releasing its own open loop credit card. Instead, the tech giant plans to offer checking accounts in 2020, a source close to the company says, making it the latest major tech company to stake a claim in the consumer finance market.
The Google checking account project, code-named Cache, will feature accounts run by Citigroup Inc. and the Stanford Federal Credit Union. Though checking accounts will be branded with the financial institutions’ names, consumers will access their accounts through Google Pay, the company’s digital wallet. The banks will handle the financial backend and regulatory compliance.
“Our approach is going to be to partner deeply with banks and the financial system,” Google executive Caesar Sengupta told the Wall Street Journal, adding that loyalty card programs could be one way the company offers unique value to consumers, banks and merchants.
“If we can help more people do more stuff in a digital way online,” Sengupta said, “it’s good for the internet and good for us.” Anand Selva, head of Citigroup’s U.S. consumer bank, echoed this sentiment, telling the Journal, “We have to be where our customers are.”
Though Sengupta said Google wouldn’t sell checking-account users’ financial data and doesn’t share Google Pay data with advertisers, news of the project sparked concern from Sen. Mark Warner, D-VA., who told CNBC he’s troubled by “giant tech platforms entering into new fields before there are some regulatory rules of the road.”
Google’s project is part of a growing trend of tech companies entering the financial space, with mixed results. In August, Apple launched the Apple Card for iPhone users, but has since come under fire for failing to report cardholder account information to credit bureaus and, alongside its partner Goldman Sachs, recently faced claims of gender discrimination in setting credit limits.
Meanwhile, on the heels of controversy over its proposed digital currency, Libra, Facebook has launched Facebook Pay, designed to facilitate payments across the company’s social networks and apps. Amazon has also reportedly been in talks with banks to offer checking accounts.