Caesar Sengupta, General Manager & VP, Payments and Next Billion Users for Google, said in a blog post that Google is “taking an important step forward in our quest to make money simple, secure and helpful.”
“Starting in the U.S., we’re launching a redesigned Google Pay app on Android and iOS. The new app is designed around your relationships with people and businesses. It helps you save money and gives you insights into your spending. It’s built with multiple layers of security to keep your money and information private and safe. And in 2021, it will give you the chance to apply for a new kind of digital bank account with trusted financial institutions.”
Additionally, Google is beginning to look more like a bank as it has announced Plex – a mobile-first bank account launched in partnership with established banks – including Citi and SFCU. Plex will include checking and savings accounts, minus monthly fees. Overdraft charges and minimum balance requirements will be no more.
Starting in 2021, Google will work with 11 banks and credit unions, including minority-owned depository banks, to offer Plex Accounts in Google Pay.
This most recent announcement by Google should come as no surprise. Big tech in Fintech has long been anticipated and Chinese tech firms have long combined digital services and finances. In many ways, Google is emblematic of the future of finance. Data-rich and ubiquitous – there when you need it but unobtrusive.
While Google did not indicate that it will pursue a federal banking charting it is pursuing a well-trodden path of partnering with established banks for financial service firms to become a neobank. This announcement should send a shiver of concern across the banking industry. Google Pay already has a solid user base of 150 million people in 30 countries that use Google Pay every month. These individuals are primed to become Plex customers. In the US, there are thousands of banks with plenty of brick and mortar bank branches. These physical locations are expensive and largely not needed. Just look at Google.
Prediction: Expect other big techs, like Apple, Facebook etc. to make similar announcements in the next year. The future of banking is on your smartphone phone not standing in line for a bank teller.
Meanwhile, if you are interested you can join the Plex waitlist.