“We’re exploring how we can partner with banks and credit unions in the US to offer smart checking accounts through Google Pay, helping their customers benefit from useful insights and budgeting tools, while keeping their money in an FDIC or NCUA-insured account,” a company spokesperson said.
But Google doesn’t plan to take center stage on the checking accounts. Instead, the financial institutions’ brands will be put on the accounts and banks will be responsible for the financial plumbing and compliance. Partner banks and credit unions will offer these smart checking accounts through Google Pay. Google also hasn’t decided whether the accounts would charge fees.
Google is attempting to deepen its relationship with consumers by entering into finance, Dan Ives, managing director of equity research at Wedbush Securities, told CNN Business.
“The company has an unmatched position within the consumer life cycle and now they’re trying to leverage where they are,” Ives said.
“The missing piece is banking,” said Ives.
Ives said Google’s initiative probably won’t cause big banks any concern for now, but Big Tech’s ongoing expansion of its financial footprint will likely pose a competitive threat in the future — especially as it shows no signs of letting up.
“This is just the tip of the spear in terms of where [tech giants are] going,” said Ives.
Lawmakers in Washington, who are already investigating the dominance of big tech companies, will probably review Google’s move closely.
Google’s effort could draw scrutiny given Washington’s distaste for both Big Tech and big banks, Jaret Seiberg, an analyst at Cowen and Company, said in an analyst note.
“We have trouble seeing how combining the two is going to produce an outcome that either Democrats or Republicans will embrace,” Seiberg said.