Google is planning to offer banking services. It intends to offer checking accounts via its Google Pay app. Services are scheduled to start the next year according to reports from the Wall Street Journal. Named ” Cache ” the platform will be a partnership with other banks.
In collaboration with Citigroup and Standford University that will handle the legal compliance and the financial framework, Google will allow financial institutions to brand their accounts by their names instead of Goole’s.
Google’s move into financial services comes after attempts from Facebook to launch Libra, a digital currency meant for direct payments on the Facebook platform. However, unlike Facebook Google has better chances for credibility claiming that users’ data will not be used for advertising purposes according to WSJ reports.
“If we can help more people do more stuff in a digital way online, it’s good for the internet and good for us.” said Caesar Sengupta, a Google official.
Google has a huge potential of reach. It operated two of the most visited websites in the world, google.com and youtube.com. It has its operating system Android installed on 2.5 billion devices connected to the internet and Google Pay user base will reach 100 million by 2020.
With all these huge numbers Google may become the bank with the largest userbase in the world. Especially it can target tech-savvy Millennials and people who have a smartphone but don’t have a bank account.
Banks trying to benefit from crypto
While companies like Google and Facebook are looking to move into finance, those operating in finance like banks and financial institutions are looking in Bitcoin and cryptocurrencies.
Despite most banks see bitcoin and cryptocurrencies as a threat that will disrupt their business model, there are banks that are friendly to crypto like RBC, The Royal Bank of Canada, the biggest bank in Canada with more than $965 billion in assets.
RBC bank is looking to integrate bitcoin and other cryptocurrencies into its operations making possible crypto exchange services.
Among buying and selling crypto the bank aims to provide also crypto storage as it may be difficult for non-tech people to store crypto for themselves.
RBC applied for four licenses in the US and Canada that show how it may offer crypto services. This is one of their licenses say.
“To individual users, managing cryptographic keys and transacting with different cryptographic assets can be a challenge. In some situations, cryptographic asset transactions may take time to be confirmed, and/or may not be compatible or supported by merchant systems or point-of-sale devices.”
While this strategy goes against the decentralized nature of crypto where is a saying “not your keys, not your coins” the bank may help spreading awareness and educate more people about crypto.
However, the real innovation in banking is the decentralized banking that maybe one day will replace the tradition banking eliminating intermediaries while being transparent and more secure.