Google plans to offer personal checking accounts next year

Marking the latest tech giant to enter the personal finance arena, Google plans to launch a checking account product sometime next year. 

Google will offer personal checking accounts in partnership with Citigroup and a small credit union at Stanford University, a source familiar with Google’s plans said on Wednesday.

The details of the project, code-named Cache, were first reported by the Wall Street Journal and follow moves by tech heavyweights Apple and Facebook into the financial industry this year.

Checking accounts would offer Google a rich source of data on consumer spending, potentially allowing the company to track the effectiveness of online ads all the way through to the point of sale.

However, Google insists that it will not sell users’ financial data, and that it does not use data from its existing Google Pay service for advertising purposes.

‘Our approach is going to be to partner deeply with banks and the financial system,’ Caesar Sengupta, general manager and vice-president of payments at Google, told the Journal in an interview.

‘It may be the slightly longer path, but it’s more sustainable,’ Sengupta was quoted as saying in the report.

Anand Selva, who heads Citigroup’s consumer bank, said digital partnerships like the one with Google would let the bank grow beyond its bricks-and-mortar network. ‘We have to be where our customers are,’ he said. 

Google’s initiative is just the latest tech play in the financial sector, prompting concerns about how the big tech companies will use their massive digital influence in other areas of business and economic infrastructure.

Facebook´s plan to launch the ‘Libra’ digital coin has met with a chorus of skepticism from regulators, worried about money laundering and the security of transactions and user data.

On Tuesday, Facebook also launched a unified payment service through which users across its platforms can make payments without exiting the app, named Facebook Pay, which is separate from its Libra project.

In August, Apple launched a branded credit card developed in partnership with Goldman Sachs.

In recent days, Apple Card has come under fire with allegations of a ‘sexist algorithm’ used to determine credit limits.

The criticism started last week, after entrepreneur David Heinemeier Hansson railed against the Apple Card in a series of tweets, saying it gave him 20 times the credit limit that his wife received.

Financial regulators in New York state have said that they are investigating the allegations.

Amazon has also reportedly explored the idea of launching personal checking accounts,