Google plans on following the footsteps of its rivals, Facebook and Apple, and delve into the world of digital banks and e-money.
Google and Digitizing Payments
Google has begun the process of discussing with banks from the United States, the possibility of providing accounts to loyal Google customers, after the power play of Apple launched the credit card service and Facebook’s current movement on Libra. With Google in the race of digitizing payments and banking, this has legislators worried and on-edge for the fear of the accelerated amount of personal information that is stored within these large technological corporations, and the risks that follow.
However, Google plans on changing the system and working with financial entities that already exist and part of the markets; these financial partners include Citigroup and Stanford Federal Credit Union (SFCU). According to a statement from Google and its representatives, “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 budget tools.”
Similar to its competition of Apple Pay, Google Pay, a service that allows electronic payments to be provided for customers, permits for smart-phone devices to buy products online and in stores. The representative of the business mogul also stated that the new digital banking options would still be up to its “rigorous standards for privacy and user control”, so loyal customers do not have to worry about any exposure.
What Happened in the Past in the Industry of Digitizing Payments?
Throughout the past year, Apple and Goldman Sachs teamed up to start a credit card service, providing the option for cash returns on purchases of any devices made by Apple and an iPhone application that allows clients to track their spending. As for Google’s banking element, known as Cache, it is a 900 billion dollar project to delve into the personal financial market. Google Wallet first appeared in 2011 as a method for customers to send money to another through the software. However, it did not gain a lot of feedback and response until the launch of Google Play, which currently has tens of millions of users around the world.
In December of 2018, Google acquired an E-money license in Lithuania that allows them to process payments and provide digital wallets across the European Union, and a separate authority from Ireland’s centralized bank registered under the Second Payment Services Directive.
“Our approach is going to be to partner deeply with banks and the financial system,” Caesar Sengupta, the general manager of payments of the corporation, said in an interview.