Yahoo Finance Google reveals banking plan, following Facebook, Apple
Google has announced it plans to partner with banks in the US to offer “smart checking”, or debit accounts, making it the latest Silicon Valley firm to move into banking.
Last month, Google signed a deal with Citigroup to develop the checking account which will be linked to Google Pay, allowing users to apply Google’s analytic tools to traditional banking accounts. It’s expected to launch next year, as reported by The Wall Street Journal.
It comes as Facebook, Apple and Amazon all move into financial services.
Earlier this year, Facebook announced plans to launch its own cryptocurrency, Libra, while Apple has introduced a credit card.
Amazon has also considered introducing personal accounts for shoppers.
“Our approach is going to be to partner deeply with banks and the financial system,” Google executive Caesar Sengupta said.
“It may be the slightly longer path, but it’s more sustainable.”
Sengupta said that if Google can help people “do more stuff in a digital way online” then that’s good for the internet and for Google.
Tech giants battle speed bumps
However, Google will like face major challenges.
Facebook is struggling against headwinds over Libra as partners ditch the project and legislators grow increasingly concerned over the plans.
In fact, regulators in the US and Europe voiced concerns almost immediately after it announced Libra – mainly in relation to Facebook’s history with privacy problems.
"As I have examined Facebook's various problems, I have come to the conclusion that it would be beneficial for all if Facebook concentrates on addressing its many existing deficiencies and failures before proceeding any further on the Libra project," California Representative Maxine Waters told Facebook CEO Mark Zuckerberg recently.
Apple, which introduced a credit card, has also had to put out fires over claims that its issuer Goldman Sachs is carrying out sexist credit checks.
According to Bloomberg, New York’s Department of Financial Services is investigating the credit card practices at Goldman Sachs due to claims on Twitter that men were receiving credit limits 20 times the size of their female partners.
The @AppleCard is such a fucking sexist program. My wife and I filed joint tax returns, live in a community-property state, and have been married for a long time. Yet Apple’s black box algorithm thinks I deserve 20x the credit limit she does. No appeals work.
— DHH (@dhh) November 7, 2019
“The Apple Card is such a f**king sexist program. My wife and I filed joint tax returns, live in a community-property state, and have been married for a long time. Yet Apple’s black box algorithm thinks I deserve 20x the credit limit she does. No appeals work,” author and tech entrepreneur David Heinemeier Hansson said.
“It gets even worse. Even when she pays off her ridiculously low limit in full, the card won’t approve any spending until the next billing period. Women apparently aren’t good credit risks even when they pay off the f**king balance in advance and in full.”
A matter of data privacy
The question for Google is how it convinces users that it’s a safe place to store financial information, and that personal data won’t be shared.
Just recently, the Australian Competition and Consumer Commission (ACCC) announced it was suing Google over the way that it collects and uses personal location data of its users, alleging that the tech giant has made “false or misleading misrepresentations” suggesting that their location has been turned off when it hadn’t.
“We allege that as a result of these on-screen representations, Google has collected, kept and used highly sensitive and valuable personal information about consumers' location without them making an informed choice," ACCC chair Rod Sims said in a statement.
The ACCC has also spoken out about Facebook and Google’s dominance, making 23 recommendations in July as to how the giants can be reined in.
“We're very concerned that current privacy policies offer consumers the illusion of control but instead are almost legal waivers that give digital platforms’ broad discretion about how they can use consumers' data,” Sims said at the time.
"Due to growing concerns in this area, we believe some of the privacy reforms we have recommended should apply economy-wide."
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