Google parent Alphabet is the latest tech giant to foray into the finance space. The company will reportedly offer checking accounts to its millions of users from sometime next year. This definitely is a big leap for the tech giant which in all likelihood is going to change the entire online finance ballgame.
Google's entry into the banking space comes a day after Facebook announced the launch of Facebook Pay, its all-app payments service that will be rolled out next week. Google is planning to create checking accounts in partnership with Citigroup, the parent company of Citibank, and Stanford Federal Credit Union. This is by far the boldest move by Google in the consumer banking system.
The company's earlier attempts in the banking space have been in credit cards and payment platforms. According to reports, the project codenamed 'Cache' will be made available to public next year. All accounts will be offered by Citigroup, while they will be administered by Stanford Federal Credit Union. The banks will become a prominent part of the company's product branding.
Google's services will be much on the lines of Apple's approach. Apple has an Apple Card integrated into the iPhone's Wallet app and Apple Pay. Google checking account users too will be able to access their account via Google Pay.
Google, which was founded only 22 years ago as a web search engine, has come a long way revolutionizing the entire digital space. Its latest move is a clear indication that the company now has big plans of changing the entire banking ballgame.
Understandably, Google wants to make everything transparent and avoid the ire of antitrust agencies for which it is highlighting its association with Citigroup and Stanford Federal Credit Union.
More tech giants exploring the banking space
Moreover, such an arrangement was quite expected given that Google doesn't have a banking license, while such a partnership might help the tech giant overcome skepticism while combating political pushback.
Earlier Apple and Facebook too had tried to explore the space but faced obstacles, with users growing skeptical about providing personal date to tech companies.
However, that hasn't stopped tech heavyweights from exploring the banking space. Earlier this year, Apple in collaboration with Goldman Sachs, launched a credit card for iPhone users. However, the iPhone maker doesn't highlight the name of Goldman Sachs on its credit cards.
In fact, Amazon too had been in talks with J.P. Morgan over a similar checking account. Also, Uber last month announced its foray into financial services to help its drivers across the globe. And on Tuesday, Facebook announced the launch of Facebook Pay that will be rolled out next week.