Google eyes consumer banking business in 2020
Silicon Valley tech companies are looking to expand their hold on customers and accumulate data on their finances
New York — Google has partnered with Citigroup and a local California credit union to offer current accounts to its customers, a person familiar with the matter said, making it the latest Silicon Valley tech giant to muscle in on financial firms’ territory.
The product, code-named Cache, will launch in 2020 with Citigroup handling most of the financial and compliance requirements, the person said. The project has not been announced publicly. Customers can access their accounts through the company’s Google Pay app, the person said.
Silicon Valley tech companies are looking to expand their hold on customers and accumulate data on their finances. The nightmare for the finance industry is that tech giants replicate the success of Alipay and WeChat in China, where money flows through digital systems without the need for banks at all.
To fight off the threat, Wall Street is striking deals to keep a firm hold on their customers.
Apple paired with Goldman Sachs in 2019 to offer a credit card that extended $10bn in loans as of September 30. JPMorgan Chase is developing an e-wallet that would give companies such as Airbnb and Amazon.com the ability to provide clients with virtual bank accounts.
Facebook launched a cryptocurrency project, Libra, that drew critics in US Congress who said the social media company’s track record on privacy and other matter disqualifies it from moving into financial services.
A representative for Alphabet’s Google did not immediately respond to a request for comment, and Citigroup declined to comment. The Wall Street Journal reported Google’s plan earlier Wednesday.