Google moves into Venmo and bank territory with checking accounts and updated payment app

Google moves into Venmo and bank territory with checking accounts and updated payment app

December 9, 2020 | 3 min read

Starting next year, Google will allow users to open a bank account using the Google Pay app in partnership with the Stanford Federal Federal Union.

The technology giant has re-launched the payment app to allow people to pay for friends, much like PayPal's popular Venmo and Square's Cash app.

"It will be widely attractive, but there is a Z generation that is more reliant on technology and more focused on mobile, especially among young people," said Anands Silva, chief executive of US consumer banks.

Google is delaying consumer funding.

The technology giant will allow users to open bank accounts, pay friends and manage budgets with the new version of Google Pay, which will be released on Wednesday.

California-based company Mountain View is working with the Stanford Federal Credit Union to create mobile bank accounts, saying it plans to add 11 new partner institutions next year. Google Pay will also allow users to send peer-to-peer payments - a feature that, through PayPal, made the Venmo app Venmo and Square Cash household names by switching to digital payments.

Regarding payments, Google CEO Caesar Sengupta explained in a video interview: "Together with our banking partners, we want to make banking more compatible with first-generation mobile phones." "This will help our partners make banking services more suitable for this generation and make them not only more convenient, but also more enjoyable."

Advertising is the last step in Big Tech funding. Competing Apple last year launched its iPhone integrated credit card with Goldman Sachs. In some markets, Facebook allows users to pay via Messenger. Chinese conglomerates Alibaba and Tencent have become payment and investment giants in mobile payment applications.

Google stated that there are no monthly fees, overdraft fees, or minimum balance requirements for Plex checks and savings accounts. Users can also request a physical debit card that will work on the MasterCard network. The Wall Street Journal reported that the partnership was formed last year.

According to Sengupta, the new version of Google Pay seems to borrow some features from other popular Google products. Users can associate Google Photos with Gmail to search for receipts, invoices, and subscriptions to manage funds. Users also receive rewards and offers based on their transaction information.

Gen Z Banking

For banks, these technology partnerships can be a way to quickly increase customer deposits. Anand Selva, executive director of the United States City Bank, said it would help the bank's retail side build nationwide and attract a new demographic.

"It will be very attractive, but especially among the younger Z generation, who rely more on technology and focus on mobile phones," said Silva.

A potential risk for banks is that technology companies will own customer relationships and brands in these transactions, while maintaining a lucrative portion of the transaction. However, Selva said that customers know that Others make deposits.

"Account is another product, but customers get the best of both worlds through the Google ecosystem," he said. "The traditional banking model is evolving," Silva said, and participation is becoming an essential part of the industry's future.

Google and other technology companies are igniting a new commercial line with its main drivers: advertising. In October, the Justice Department accused Google of an illegal monopoly on company search to the exclusion of competitors. A report by a congressional committee also claimed that Google used data collected from the Android operating system and Chrome for its other business.

Google has announced that it will use some data about the payment product that it believes most mobile payment service providers need. For example, Google uses personal information to create and maintain a Google Pay account. Regulators have also requested some information to protect against fraud and money laundering.

 The company said: "Google Pay will never sell your data to third parties and will not share your transaction history with the rest of Google to select ads."