Google joins big tech banking with personal checking accounts
The tech giant is the latest to muscle further into the financial services industry
Google is gearing up to launch a personal checking account service via Google Pay, code-named Cache, in partnership with Citigroup.
Due to launch in 2020, Cache will compete with rival services from other tech giants challenging the banking industry's supremacy, including Facebook, Apple, Uber, and Amazon.
In the past year alone, Facebook has announced its Libra digital currency project, Apple introduced a credit card, and Amazon laid the groundwork for personal consumer accounts. Each effort has compounded the anxieties of consumers and regulators as big tech branches out into areas traditionally beyond the scope of technology firms.
News of Google's Cache comes in the wake of a whistleblower's exposé of Project Nightingale, Google's partnership with the largest non-profit healthcare system in the US that granted the tech giant's access to 50 million Americans' medical data. The project spooked plenty of consumers and lawmakers, despite the fact that it technically complied with Health Insurance Portability and Accountability Act (HIPAA) regulations.
On Tuesday German chancellor Angela Merkel warned Europe to reclaim "digital sovereignty" over its data from Silicon Valley tech firms instead of relying on them.
"So many companies have just outsourced all their data to US companies," Merkel said. "I'm not saying that's bad in and of itself – I just mean that the value-added products that come out of that, with the help of artificial intelligence, will create dependencies that I'm not sure are a good thing."
Google's financial offerings, like its predecessors, are already having trouble getting off the ground. After intense regulator opposition, Facebook's Libra digital currency lost several partners. Meanwhile, charges of discriminatory credit limits have been brought against Apple's credit card partner, Goldman Sachs.
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However, Google's commitment to intimate collaboration with banks might set Google's checking account service apart from its competitors.
"Our approach is going to be to partner deeply with banks and the financial system," Google executive Caesar Sengupta said, as reported by the Guardian. "It may be the slightly longer path, but it's more sustainable."
Google will not sell account holders' financial data, just like it doesn't share Google Pay data with advertisers, according to Sengupta. Whether or not this will be enough to assuage public skepticism of Google's protection of their information is still up in the air.
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