Google plans to launch a new service called Cache next year, which will see it start to offer current accounts.
Google is the latest tech giant to move into the banking space with plans to give users the option of setting up a current account. First reported by the Wall Street Journal, the project, codenamed Cache, will launch next year with the accounts run by Citigroup and other financial institutions.
The service, which will be launched via Google Pay, will allow users to add the tech firm’s analytic tools to traditional banking products.
In a statement, Google said: “We believe our partners’ regulatory and financial know-how is a great complement to our experience in building helpful tools and technology for our users.” Unlike its other rivals such as Apple or Facebook, Google said it will be somewhat hands-off in terms of the banking infrastructure.
Explaining what Google gets out of this plan, it said it will be able to plug its analytical tools into the current account, as well as potentially offering advantages to consumers and banks, such as loyalty programmes.
This will also give Google a boost to the highly lucrative advertising arm of its business by being able to tie in purchases made through its current accounts with advertisers.
‘A giant Darwinian experiment’
Google’s vice-president of product management, Caesar Sengupta, said the company is still considering whether service fees will be included with the current accounts.
Citigroup released its own statement confirming the project, adding “privacy and transparency are, and will continue to be, critical priorities”.
As for what features and functions will tie into Google Pay through Cache, a spokesperson for Citigroup said it is yet to be determined. However, it could be similar to what the bank is doing in China with WeChat, where payments are processed through the messaging app.
The news comes after Google got the green light to be a payments institution from the Central Bank of Ireland under the PSD2 directive in January, giving the company the ability to issue and acquire payments in the EU.
Speaking with the BBC, Bain & Co partner Gerard du Toit said this move was part of a growing, uneasy partnership between big tech and banks, the latter realising their need to partner for fear of being left behind.
“I sometimes describe this as a giant Darwinian experiment of different couplings of the banks and the big techs,” he said. “There will be some mutations that succeed and others that fail.”