A new report by the Wall Street Journal reveals that Google is all set to make the new big move into the banking and finance sector. A new service, project codenamed ‘Cache’, is expected to launch sometime early next year.
Through Cache, Google has partnered with Citigroup and Stanford Federal Credit Union to provide checking accounts to its consumers via the Google Pay app. These checking accounts, however, will not be branded under the Google brand name and instead will be directly branded as services from the financial bodies providing them. This decision sets Google’s financial move different from its competitor Apple’s Apple Card, which is mainly marketed as an Apple service while downplaying the partnership with Goldman and Sachs.
The Wall Street Journal quoted Google VP of Product Management, Caesar Sengupta, as saying,
Google Project Cache: Eyes On FinTech
Providing a service such as checking accounts has many benefits for Google. The primary benefit is access to information about users’ day-to-day financial activity such as details about where they spend most and how they spend. The service will also let Google gauge the monthly incomes of its users. Such sensitive information is undoubtedly valuable and can give a company the upper-hand in a competitive space such as Silicon Valley. Despite the fact that such a move might create a monopoly for Google in the tech industry, the tech behemoth has assured that the data collected through this service will not be used for advertising.
Such a service will undoubtedly increase the number of users under Google’s belt, and with Google’s plans to offer loyalty programs and waive off service charges on their checking accounts, this user base is likely to grow.
According to Sengupta, this partnership will help banks attract younger users who prefer to carry put most day-to-day tasks using their smartphones.
As digital transactions are becoming more common – 29% of consumers in the US would like to pay for everything using their Smartphones, this alliance will keep the concerned banks ahead of the curve.
Sengupta also stated that banks will gain from Google’s ability to turn large amounts of data into something of value to their products.
Big Tech’s Push into the Financial Sphere
Google is not the first company to venture into finance and banking services. Many other tech giants offer mobile wallets and payment services, such as Apple and Samsung. Facebook is the newest player in the field, with its soon to be launched Facebook Pay.
Facebook is also in the process of launching its own cryptocurrency, Libra. However, it has faced many setbacks along the way, with criticism from regulatory bodies and half of its initial partners leaving the project.
Early last year, Amazon’s plans to launch checking accounts for teens also came to light. However, nothing much has been said on the matter since.
Most Big Tech today is viewed with a critical eye as users have started questioning their workings and their intentions due to frequent data breaches and unethical use of user data, but it seems that tech giants remain unbeatable due to their excessive utility in the daily lives of people. With pushes to participate in the finance sphere, the big tech will become even more indispensable in the coming years.