Google in 2020 will offer a new financial service — the possibility of opening Bank accounts. To access and manage the Google Pay, reported The Wall Street Journal (WSJ) with reference to the top management of the company. According to the newspaper, the project is tentatively named Cache and implement the Corporation will, together with the financial group Citi and the credit Union at Stanford University. “More information will appear in the coming months”, — quotes the words of a Google spokesperson Craig ever Reuters.
If the project is run, it will mean that Google, like other tech corporations — Apple, Amazon and Facebook looking for your niche in the financial services market.
Giants in the pursuit of pineham
Apple introduced this summer in the US virtual credit card developed in conjunction with the Bank Goldman Sachs. Their partnership, however, became strained after the IT company used the slogan “Created by Apple, not the Bank.” Complicated the situation and the gender scandal: users have found that women, the Bank offered a credit limit less than men, even if they earned more, their credit history was better.
Facebook, in turn, is developing its own cryptocurrency Libra and recently launched the online payment service Pay Facebook. It will allow users to make payments directly in the Facebook, Facebook Messenger, Instagram and WhatsApp. Only here major partners social networks — PayPal, Visa, Mastercard and eBay has refused to participate in the project Libra. Blame — attention to his American and European regulators, as well as criticism of market players.
Amazon still discussing with the banks possible supply of financial services.
“Google Bank” will not
Google intends to avoid the mistakes of its competitors. So, financial operations and transactions, the Corporation will leave at the mercy of banks-partners — from her own it would still not need a license. In addition, as explained by the WSJ, the head of payment services Google Caesar Sengupta, the company intends to work closely with the banks and financial systems. Therefore, the account will be opened under their brands and not under the guise of Google. That is, the Corporation plans to become an intermediary between users and the Bank, and not to follow the path of the Chinese WeChat, which offers an independent ecosystem of payments and transfers.
“This may be a longer route, but more reliable,” said Sengupta.
Experts of Forbes consider, that Google has a chance to become more successful than the same credit card Apple. However, on the other hand, the coverage did not help Google to make its popular instant messenger and social network.
Authorities are closely watching technologytime
You will save this approach Google from the attention of the American authorities? Unlikely. Regulators are already being studied, it’s not much of the impact of technological corporations have on the market and users, and do not interfere with their “sizes” of healthy competition. So Google plans too, likely will meet with “a hard political position,” writes Bloomberg referring to analysts of the investment company Cowen. Hardly Washington will not interfere with the project, but with “intense national audit office” he may encounter.
“The tech giants want to get into a new industry before you appear to the appropriate regulator’s rules” — he criticized them Senator mark Warren in an interview with CNBC.
But for FINTECH companies is a way to become closer to the users and their valuable data. The same Google, for example, already collects huge data from its search engine, actively sells smart devices for the home and even introduced to the field of American healthcare. Financial services — a natural continuation, experts say CNN.
A matter of trust
But companies have to try to convince users that it can be trusted with financial data. On the background of scandals erupted regularly about the next leak or the like of the Corporation without the knowledge of the customers use their data, it may not be so simple. According to the study by McKinsey & Co, cited by the WSJ, the information Google is ready to trust 58% of the interviewed people. That’s more than Apple (56%) and Facebook (35%), but less than Amazon (65%). Sengupta claims that the company does not use available data for advertising or sell them to advertisers. But you believe in the users?
Former employees told Reuters that the United States faces challenges in attracting new customers to the already existing financial products — too strong competitors. So important drivers here can be a loyalty program and maybe the waiver of a fee for the service. But last not sure.
Estimated to Juniper Research, Google Pay in 2020 will use 100 million people worldwide — against 39 million in 2018. While Apple Pay a year ago has had 140 million users and a potential audience of Facebook Pay may be more than 2 billion users of the social network.
FINTECH will replace the classic banks?
Nearly four years ago, the head of Sberbank German Gref said that the demand for traditional banking services will last another ten years, and the banks themselves in their traditional view, will “die” much earlier. According to him, only in Russia for five years would not be one Bank, which anyway will not affect the digitalization. And they should take the place of ecosystems of high-tech companies with a banking license. The same Sberbank is moving in this direction for several years. It turns out, classic banks and technology companies sooner or later have to “meet” somewhere in the middle.
But the way this is not so simple, writes The New York Times. Yet, according to the publication, most attempts by tech companies to find an alternative to classic banking has either failed or become niche products. All because they don’t offer anything innovative that would force users to change their usual Bank. Cons of credit institutions that really annoy customers — high fee, low interest on deposits and bad service — a technology company is not yet ready to decide. And banking applications already largely meet the technological needs of users.
“People are quite inert. And when it comes to banking services, you must offer them something really extraordinary that they want to use it” — sums up analysts Alite Group.
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