Search giant Google has announced that it will be making a foray into the world of consumer banking, after launching new checking accounts for its customers, the Wall Street Journal reports.
Called the “Cache” project, the move comes through a partnership with banking giant Citigroup and a small credit union based out of Stanford University.
Google wants to be your checking account. It is Silicon Valley’s latest effort to burrow into your financial life. https://t.co/nmiUrrig1g
— The Wall Street Journal (@WSJ) November 13, 2019
Big Tech and Financial Services
Per the Journal, Caesar Sengupta, an executive at the internet giant, claimed that the initiative would help people to “do more stuff in a digital way online,” adding that they could also expand the scope of the service to cover things like loyalty programs as well.
Google and its partners are working on the modalities, including whether or not to include fees in the accounts. This is a tricky one as there’s more money to be made if they have customers maintaining a certain bank balance. But, it’s a slippery slope, and the tech firm has to be careful what it decides.
“Our approach is going to be to partner deeply with banks and the financial system. It may be the slightly longer path, but it’s more sustainable,” Sengupta said to the Journal.
Google joins the ranks of internet companies that have made inroads into financial services with this initiative. Smartphone manufacturer Apple has its Apple Card, the fruit of its collaboration with Goldman Sachs. Apple Card is used by Apple customers to make payments within the company’s ecosystem.
Facebook is also inching closer to providing financial services, through its Libra stablecoin, but that doesn’t look like a project that might take off anytime soon.
The Dark Clouds of Data Handling
As exhilarating as this project might be for the company, it will draw the ire of many concerning how Google, an advertising company, would handle consumer’s financial data.
This is a ground for worry as checking accounts could provide Google with data on consumer’s spending and their earnings. But, Google is back with its promises. The company was quick to quell any concerns by noting that it won’t be selling any checking account financial data to advertisers. The company wants skeptics to look towards Google Pay, its native payment service, which it claims doesn’t sell data for any advertising purposes.
Nine privacy, social justice and consumer groups are calling for the U.S. government to block Google's $2.1 billion acquisition of fitness-gadget maker Fitbit, citing antitrust and privacy concerns.https://t.co/OY0yQ8GYlC
— Brand Equity (@ETBrandEquity) November 14, 2019
This isn’t the only privacy issue that Google will be finding itself embroiled in recently. Earlier this month, Google acquired fitness and device manufacturing company Fitbit in a $2.1 billion deal. But, the deal hasn’t gone down well with some anti-Google customers who have taken it upon themselves to destroy their Fitbit devices in public places. Others have called on the U.S government to block the deal.
Fitbit has about 28 million users, and while both companies have made commitments that the acquisition won’t bring changes to how customer’s health data are handled, the concerns over them linger nonetheless.
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