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New financial world: The checking account at Google, the credit card of Apple

2019-11-14T14:05:11.341Z


Google wants to offer their own current accounts, on Facebook you can send money via apps - and Apple and Amazon offer their own credit cards. The tech giants continue to penetrate into the finances of the users.



After Apple and Facebook, Google is also strengthening its ambitions in the banking business. In the coming year, the company plans to offer its own bank accounts in cooperation with Citigroup and the smaller credit union Stanford Federal Credit Union. Google manager Caesar Sengupta told the "Wall Street Journal" ("WSJ").

The service with the project name "Cache" should be able to be used via Google's payment offer Pay. "Our approach is a deep partnership with banks and the financial system," Sengupta told the WSJ. "That would be a long way, but more sustainable." It is still not decided whether the account fees would be required.

To win customers, the account could be free or a loyalty program introduced. According to the report, Google does not want to offer the accounts under its own name. The group does not want to sell customers' financial data, Sengupta said. By working with the banks Google wants to avoid having to apply for a separate banking license.

Facebook with comprehensive payment service

The move joins in recent efforts by IT corporations to step up their efforts in the financial services industry.

For example, Facebook announced an overarching payment service for its apps on Tuesday. Users of Facebook, Messenger, WhatsApp and Instagram can first transfer money to other users and certain companies and foundations in the US via Facebook Pay.

The social network is also trying to start its own digital currency Libra. However, important partners in the banking sector have withdrawn from the project following strong headwinds from central banks, supervisors and policy makers. Whether Facebook can bring out its own cryptocurrency is therefore open.

Google Pay successful in India

Google is pursuing the longer-term approach through a partnership with banks. The group wants to strengthen its particularly successful in India service Google Pay. In the country, many users pay through the app for purchases or services. The payment runs through a credit card system.

Whether Google also wants to publish its own card as Apple has recently introduced, was not apparent from the "WSJ" report. Apple has been offering its own credit card since August through its payment service Apple Pay in cooperation with US bank Goldman Sachs.

The card has recently come under criticism for possibly lending women less credit than male users. Also Apple co-founder Steve Wozniak reported it. The US financial regulator is now investigating the allegations.

For IT companies, increased integration with financial services not only means smoother processing of payments in their ecosystem. They also get valuable information about the financial circumstances of their customers. Amazon also lends its own loans to marketplace dealers and can bind them more strongly to their own trading platform.

So far, the banking industry has been trying to prevent a deeper penetration of the tech companies into their industry through partnerships. Since the banks have the necessary licenses and have their own customer base, they are an attractive partner for the IT companies. However, Facebook's push with Libra may have been a warning signal that the industry is seeking greater influence.

Source: spiegel

All business articles on 2019-11-14

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