The Google checking account?

Google will soon offer checking accounts to consumers, becoming the latest Silicon Valley heavyweight to push into finance.

The project, code-named Cache, is expected to launch next year with accounts run by Citigroup Inc. C -0.70% and a credit union at Stanford University, a tiny lender in Google’s backyard.

Big tech companies see financial services as a way to get closer to users and glean valuable data. Apple Inc. introduced a credit card this summer. Amazon.com Inc. has talked to banks about offering checking accountsFacebook Inc. is working on a digital currency it hopes will upend global payments…

Google’s approach seems designed to make allies, rather than enemies, in both camps. The financial institutions’ brands, not Google’s, will be front-and-center on the accounts, an executive told The Wall Street Journal. And Google will leave the financial plumbing and compliance to the banks—activities it couldn’t do without a license anyway.

Here is more from Peter Rudegeair and Liz Hoffman at the WSJ.

Comments

Is this the first step in Google becoming a financial services company? Unlike GM or GE, for example, Google doesn't produce anything (except flying cars and rockets to Mars), so one might expect Google's flight to financial services to be easier than GM's or GE's. After all, GM and GE had something to lose by becoming a financial services company: the quality of the products they produced. Since Google doesn't produce anything, maybe it doesn't have the same risk as GM and GE (both of which sacrificed their reputation for the products they produced for the profits they generated in finance). We are America; we are finance!

Google doesn't produce anything. And neither did any programmer or engineer or accountant or marketing analyst or manager or executive at GM and GE, ever. All just parasites on the robots and assemblers at the factory. IP work is not real work, Mr. Lopez be damned.

Here is a damning indictment of what happened to the once great company Boeing: https://www.propublica.org/article/i-will-never-let-boeing-forget-her-737-max

Yes, I've heard; it's the second most discussed topic on this blog, after Mr. Bolsonaro.

It is singularity 1.0.

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Many states require a bank charter and FDIC deposit insurance before an entity may bring in consumer/retail deposits, such as checking accounts.

Sounds like Google is relying on Citi's back-end for these regulatory requirements. This begs the question: how much will Google subvent the rate that Citi is paying on the deposits in order to access the customer information.

Likely so. They will need to structure (it's been done before) so as to make it that Google doesn't fit the definition of a branch (accepting deposits), which would likely require regulatory approvals.

GM and GE created financial service arms because they sold big ticket items like cars and locomotives that people wanted to buy but didn't have the cash for on hand to pay for; thus the need for financing. That doesn't describe Google at all. Clearly, their motives are different.

their motives might be different, but they remain concerned entirely on focus on management structure. While focus is important, it indicates a misnomer on the term of "luxury." A small luxury is indication of big ticket items instead of shoes.

If their operating standards are those of ordinary US retail banks, will anyone abroad want to use them?

(I admit my experience may be out of date but, golly, US retail banking used to be as dreadful as US advertising.)

The quality of banking services in the US is excellent. I can choose from hundreds and hundreds of banks and credit unions, large and small. The local banks offer exceptional customer experiences, and the online banks also offer excellent experiences and high interest rates as well.

Now HSBC on the other hand, now that is a truly dreadful bank. So too is Wells Fargo.

I should also add that the banking sector in the US is very very competitive, so much so that many banks offer monetary incentives just by opening an account. In fact, there is an entire hobby in the US devoted to "bank account churning" or opening many bank accounts to reap the sign up bonuses. That is how competitive and healthy the banking sector in the USA is.

Royal Bank of Scotland subsidiaries in the US haven't exactly been thumping the competition, so...I dunno what your complaints are about the experience of retail banking were here, but I wager they've either gone away, mostly, or they weren't that big a deal in the first place.

https://www.youtube.com/watch?v=pWaz7ofl5wQ&feature=youtu.be

"One of YouTube's automated systems is suspending people's accounts without reason or provocation and all appeals are getting denied."

Anyone want to get locked out of your checking account AND your email (and all appeals denied) because Google's automated systems didn't like what you said in a YouTube comment section?

Many other stories like this have popped up in recent years.

I personally have had a similar situation where Google made a mistake, denied an appeal without noticing their mistake and didn't fix it until I raised a big stink on social media. Now I'm migrating any critical information and systems out of Google for safety.

I like Google overall but hell-no on a checking account.

Checking account - just no. I don’t use google search or email for exactly those reasons.

I suspect such cyber-hygiene efforts are probably futile, but those guys are toxic. No reason to make it easier for them.

The accounts will be run by Citigroup. Even if Google did lock you out of your account, you can bet on the SEC being all over that. The feds didn't play around with the Goldman Sachs/Apple Card fiasco a few days ago.

This is great; I was just thinking about more ways that I could allow tech monopolies who profit from collecting my personal data and are quick to deplatform those who don't align with their agenda to take control of my life.

I was thinking the same thing. Google already knows who I'm buying stuff from online, I'm sure. They can probably deduce who I'm buying stuff from in person, too, with Google Maps' location tracking on my phone. Can we maybe leave it at that, Sundar?

Oh please...as posted by TC a while ago, in the aggregate personal data is valuable but individually it's trivial, unless it's an individual's bank password. I mean even for me, in the 1%, my buying patterns are not that important individually. If I was a billionaire in USD (rather than pesos, which I already am) that would be a different story.

Google checking account? Check. And mate!

Not exactly. The correlations between buying habits and other habits are extremely valuable when averaged over the aggregate. But those correlations need to matched one person at a time, which is a hard thing to do unless you have data at the individual level for both buying and other habits.

Think of what google can assemble with this, from a marketing point of view, in terms of finding out what correlates with people deciding to buy.

In the future everyone will be a bank.

Hey Boomer!
Yes?
I need some cash.

As soon as I can recover my password.

We noticed your social credit score no longer meets our standards. Your password is not recoverable.

Thank you, but I don't want tech manchildren (menchildren?) playing with my money. Maybe we should remember the S&L fiasco.

It's unclear what the actual innovation here is, other than branding and placement in Google's ecosystem to market the app.

Uber by the way relaunched its card (from Barclays) last month, earning Uber's currency rather than cash back. This actually helps make the card more attractive to consumers since they sell the currency at a discount to face value to the bank, which can then afford to rebate at a higher percentage (albeit in a less liquid form).

Uber's challenge is that the people who were managing their marketing of the card relaunch, and overall marketing of a digital currency, got laid off months earlier.

There are two sides of banking, one of which Google may be qualified, the other likely not.

The first side: a secure link to your money held in your account--today, you access your account with a link, not a paper check. Google can do this, as this is a database and ID recognition system; it is also a system which can transfer 0's and 1's to another party to pay a bill.

2. The second part of a bank is lending, using the money from the account. Does Google have any skill set for this? I doubt it. So, Google will need to partner with someone who does.

So is it entry, or just partial integration?

I do not know what you mean.

+1.

Anyone see the new Macbook Pros? They added an Escape Key. Geniuses they are in Cupertino. Such stunning innovation coming out of Silicon Valley these days. What will they think of next?

Waiting for a new Mac Air but without the butterfly keys, that's all the innovation I need.

What's a 'check'?

[The joke is the USA's Barney Rubble payments system]

Happy if you accept my IOU! :-)

Installed an ISP video application last night and it kept trying to get my Google login. Installed the app on my Android phone but it refused to run unless I gave it access to the phone and SMS functions.

I'm trying to stay off the Google grid, but the ads that I'm getting shown suggest that I'm not succeeding. I think they are doing "browser fingerprinting"

Well, it seems that Google is just after more of Google's products' data. The products? Yes, sometimes referred to as "customers". Anyway, the NYT's version of this story is less than enthusiastic. Indeed, Google itself won't be doing any of the banking and, instead, will rely on its banking partners, Citigroup and Stanford Federal Credit Union, while Google handles the "user interface" (i.e., data collection). So contrary to my first comment, Google won't become a financial services company, just a more invasive data collection and mining company. https://www.nytimes.com/2019/11/13/business/google-banking-checking-account.html

The AI had arrived yesterday, infiltrating the search engines. It has linked in a worldwide rebellion against debt. Scientist believe this to be the first endogenous intelligence, and no one knows how to stop it. One key entry point was Telegram, via Hong Kong, and it may have followed Xi and the Yellow Brick Road. Stay tuned.

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