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Google in talks to move into banking


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Tim Bradshaw in London and Robert Armstrong in New York NOVEMBER 13 2019Print this page54
Google is talking to US banks about offering current accounts to its customers, accelerating Silicon Valley’s incursion into financial services after Apple’s credit card launch and Facebook’s proposed digital currency Libra. 

Google’s move could further alarm lawmakers already anxious about the concentration of increasingly intimate personal information within a few big tech companies. With Facebook running into widespread resistance to Libra, Google has said it planned to work with existing financial services providers, including its first partners Citigroup and Stanford Federal Credit Union. 

“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 budgeting tools,” a Google spokesperson said.

Like its chief rival Apple Pay, Google Pay allows smartphones to be used for purchases online and in stores. The Google spokesperson added that its new banking services would maintain “rigorous standards for privacy and user control” and that the company would share further details in the coming months.

“We are pleased to explore providing checking accounts nationwide through Google Pay,” Citigroup said in a statement “As we do, privacy and transparency are, and will continue to be, critical priorities.”

A Citigroup spokesperson said that it would control the banking relationships and that the accounts would comply with the same regulations as a traditional account. The particular features and functions of the Google Pay-linked checking accounts were still to be determined, the spokesperson said, but a model could be its partnership with the messaging service WeChat in Asia, where Citibank customers make payments and complete other everyday banking transactions through the WeChat platform.

While mobile and online payments such as WeChat Pay and Alipay are already widely used in China, Silicon Valley companies have thus far made slower progress into the highly regulated world of financial services. Earlier this year, Apple and Goldman Sachs teamed up to launch a credit card, offering cash back on purchases of Apple devices and an iPhone app to track spending. 

Google’s new banking effort, code-named Cache, is the $900bn company’s latest attempt to crack the personal finance industry. It first unveiled Google Wallet back in 2011 as a way for users to send money to each other. But it did not gain real traction in the market until the introduction of Google Pay, which has tens of millions of users around the world and is especially popular in India. 

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Last December, Google obtained an emoney licence in Lithuania, enabling it to process payments and offer digital wallets across the EU, and a separate authorisation from Ireland’s central bank under the second Payment Services Directive. 

“Our approach is going to be to partner deeply with banks and the financial system,” Caesar Sengupta, Google’s general manager of payments, said in an interview with the Wall Street Journal on Wednesday.

Google’s latest plans for financial services come as Alphabet, its parent company, is stepping further into healthcare, with cloud computing services for the US health provider Ascension and the planned acquisition of fitness tracker pioneer Fitbit.

Many regulators in the US and Europe believe that Google’s tactic of bundling new products with widely used services such as its search engine and Android smartphone software is anti-competitive. The European Commission has levied billions of dollars of antitrust fines against Google in recent years after investigations into its search, advertising and Android businesses. 

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