Saturday , September 19 2020

Google in talks about switching to banking


Google is negotiating with US banks to offer current accounts to its customers, speeding up Silicon Valley's breakthrough in financial services following the launch of Apple's credit card and Facebook's proposed digital currency Libra.

Google's move may additionally alert lawmakers already concerned about the concentration of more intimate personal information in several large tech companies. With Facebook facing widespread opposition to Libra, Google has announced plans to work with existing financial services providers, including Citigroup's first partners and Stanford Federal Credit Union.

"We are exploring how we can work with banks and credit unions in the United States to offer smart checking accounts through Google Pay, helping their clients benefit from useful insights and budgeting tools," a Google spokesman said.

Like its main rival Apple Pay, Google Pay allows smartphones to be used for online and in-store purchases. A Google spokesman added that its new banking services would maintain "rigorous standards of privacy and user control" and that the company would share additional details in the coming months.

"We are pleased to investigate providing nationwide checking accounts through Google Pay," Citigroup said in a statement "As we do, privacy and transparency are and will remain key priorities."

A Citigroup spokesman said it would control banking relations and that the accounts would comply with the same regulations as the traditional account. The specifics and features of Google Pay related checking accounts had to be determined, the spokesman said, but the model could be its partnership with WeChat messaging service in Asia, where Citibank customers make payments and complete other day-to-day banking transactions through the WeChat platform .

While mobile and online payments such as WeChat Pay and Alipay are already being used in China, Silicon Valley companies have so far made slower progress in the highly regulated world of financial services. Earlier this year, Apple and Goldman Sachs teamed up to launch a credit card, offering them cash back payments for Apple devices and an iPhone application to track spending.

Google's new banking effort, code-named Cash, is the company's latest $ 900 billion attempt to topple the personal finance industry. It first discovered Google Wallet back in 2011, as a way for users to send money to each other. But it did not gain real market momentum until the introduction of Google Pay, which has tens of millions of users worldwide and is particularly popular in India.

Last December, Google was granted an emoticon license in Lithuania, enabling it to process payments and offer digital wallets across the EU, and special authorization from the Irish Central Bank under the Second Payment Services Directive.

"Our approach will be to deeply partner with the banks and the financial system," Caesar Sengupa, Google's chief payment officer, said in an interview with the Wall Street Journal on Wednesday.

Google's latest plans for financial services are coming as Alphabet, its parent company, moves further into healthcare, with cloud computing services for US healthcare provider Ascension and the planned acquisition of fitness tracker Fitbit.

Many regulators in the US and Europe believe that Google's tactic of including new products with widely used services, such as its search engine and Android smart phone software, is anti-competitive. The European Commission has in recent years collected billions of dollars in antitrust fines against Google following investigations into the search, advertising and Android business.

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