As 2019 drew to a close, Google revealed a plan. The company essentially announced its intention to get involved in the world of banking by offering checking accounts in 2020. Cache – the project’s nickname – quickly made headlines. Yet many consumers are still confused about what Google banking involves. If you’re curious about Google’s checking account. Here’s what you need to know.
Google Won’t Technically Be the Bank
While Cache involves Google getting involved in banking. Google isn’t becoming a bank. Instead, the tech giant is partnering with other financial institutions.
Both Citigroup and Stanford Federal Credit Union were said to be part of the project. They will manage the actual accounts. Not only will this provide some potential Google checking account users with additional peace of mind since both of those institutions are experienced in banking. It also means the accounts will be NCUA or FDIC-insured. This depends on what the account is held.
Other financial institutions may also get involved. Although it isn’t clear which ones may have expressed an interest or will ultimately become partners.
Google Pay Integration
If a person signs up for one of the Google checking accounts, they get the benefit of integration across various Google products and services, including Google Pay. In fact, once accounts become available, customers will need to head to Google Pay to open one, if they choose.
For some, this will be incredibly convenient. From Google’s perspective, it would also potentially increase the number of Google Pay users.
Industry forecasts suggest that the number of Google Pay users should hit 100 million in 2020. However, that’s a far cry from the 227 million users that Apple Pay is expected to have. With the Cache checking accounts, Google may be able to start catching up to its digital wallet competitor, or at least pull away from Samsung Pay, which is also expected to have 100 million users this year.
Insights and Tools
While it isn’t clear precisely what Google has in mind, the company does intend to give users of a Cache checking account access to a range of financial tools and insights. Likely, budgeting tools will be a major component of the offering, allowing users to allocate funds and track spending without having to manually sort the majority of their transactions. Other details about user spending patterns may also be made available.
Account Holder Data
It isn’t a secret that Google collects massive amounts of data on its users. In one instance, a report said that, when a user downloaded their data file, it was 2GB. That means the download was about the equivalent of 1.5 million Word documents in size.
Many people would probably be concerned about Google potentially having access to their banking information. Most consider this type of data incredibly sensitive and may be reluctant to hand it over to a company that they may not trust completely.
Google has stated that it doesn’t intend to sell the financial data of account holders. Additionally, the company says it doesn’t leverage Google Pay data for advertising purposes. However, it isn’t clear how the tech giant may use the information internally.
Many lawmakers have openly expressed concerns over various tech companies making strides toward the world of finance. Potential legislation was drafted in response to Facebook’s Libra, a project that involves the creation of essentially a cryptocurrency.
Additionally, Google has been at the center of antitrust investigations. Moving into a new sector might not fly, depending on how legislators view the move and whether new laws get passed that govern what tech companies can and can’t do when it comes to banking and finance.
When Google Banking Will Be Available
It still isn’t clear exactly when (or if) Google checking accounts will be available. As of this writing, there isn’t a concrete release date for the new service. Additionally, it’s possible that new or emerging legislation may alter timelines, depending on what is investigated, discussed, or passed.
Would you open a Google bank account? Do you think tech companies should get into the banking industry? Why or why not? Share your thoughts in the comments below.
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