Beginning next year in 2020, Google plans to offer checking accounts. If everything goes as planned, it will be a bold move for the tech giant, though Google has involved itself with credit cards and platform payments before.
According to the Wall Street Journal, Citigroup and Stanford Federal Credit Union will reportedly be in charge of the accounts.
Google’s latest venture will be part of a project called Cache. The move will make Google the latest tech leader in Silicon Valley to venture into the banking sector. Facebook and Apple have previously tried their own hand at similar moves but mostly faced opposition. Consumers have grown even more skeptical after Facebook’s data breach, which has left many people hesitant about giving personal information to high-profile tech companies.
Caesar Sengupta, a Google executive, iterated that Google doesn’t plan to sell its customers’ data.
“If we can help more people do more stuff in a digital way online, it’s good for the internet and good for us,” said Sengupta.
Banks have grown increasingly concerned about small-scale fintech competition. But, Big Tech is proving to be the real threat. Companies like Amazon, Facebook, and Google have built a rapport with hundreds of millions of consumers, offering tech an instant pool of potential clients.
And, earlier this year, Apple joined Goldman Sachs in launching a credit card for its iPhone customers. Apple has recently faced criticism that its algorithm to determine creditworthiness is biased towards men.
Facebook has also had its own problems when some of its principal financial backers dropped support of Facebook’s new libra platform, which has been facing regulatory issues.
One of the leading oppositions in the growing movement of giant tech entering the banking and payment industry is Mark Warner, a senator from Virginia. Earlier this week, Warner said: “I’m concerned when…, whether it’s libra or the Google proposal, …these giant tech platforms entering into new fields before there are some regulatory rules of the road.”
Warner says the primary concern is that once big tech has a presence in the industry, “the ability to extract them out is going to be virtually impossible.”
Before getting into politics, Warner was a tech entrepreneur himself.
Google says the checking accounts it plans to offer will be branded with the names of the financial institutions who will be in charge of the accounts. The advertising technology company says it won’t brand the accounts itself.