Google Could Access Data On Pay And Banking Habits With New Bank Accounts

Google plans to launch a checking account aimed at individuals as soon as next year.

The search giant will tie the accounts to its Google Pay offering, which already has 100 million users around the globe, a person with knowledge of the project told CBS MoneyWatch.

Google isn't launching its own bank. Rather, it's partnering with Citigroup and a San Francisco University credit union to offer the accounts to customers in the US.

The details of the accounts have not been finalised, but the Google Pay accounts would likely have rules similar to a typical Citi checking account.

Google will offer users checking accounts from 2020. Image: Getty Images.

Google's move into banking comes as other Big Tech companies like Apple and Facebook are diving deeper into consumer banking and financial services. It's also happening at a time when consumer watchdogs and lawmakers increasingly warn that those same companies are getting too large and may have too much control over personal data.

"When competition expands that's a good thing," said Mike Moebs, a financial services consultant who specialises in bank accounts. He added that Google has been working on the checking accounts for at least three years.

"Big question that it raises is will Google share that data, and that is a big privacy concern," Moebs said.

Earlier this week, Apple and its partner Goldman Sachs ran into trouble with Apple Card after a prominent user accused the two companies of gender bias. Facebook is working on a cryptocurrency called Libre that it hopes could supplant the use of dollars for online purchases, something Congress and central bankers have said is a cause for concern.

The accounts will be tied into the existing Google Pay scheme. Image: Getty Images.

Checking accounts could offer Google plenty of new consumer data, including how much people are paid, how much they spend and where and when they spend. Google told the Wall Street Journal it won't sell that user data to others, but it does plan on using whatever information it can mine from the accounts to partner with other companies for things like loyalty programs.

"High-tech companies are experts at data exploitation and monetisation," said Dennis Kelleher, president of Better Markets.

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Kelleher cited recent revelations about Google's secret collection of detailed health care data on 50 million Americans as a reason for concern regarding its push into finance.

"It's not clear that anyone other than high-tech companies would benefit from allowing commercial companies to provide those products and services, rather than financial companies," he said.

Google Is partnering with Citibank to offer the account service. Image: Getty Images.

Citigroup confirmed to CBS MoneyWatch it was partnering with Google on the accounts.

Google Australia has been contacted regarding when the accounts will be rolled out across Australia.



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"We are pleased to explore providing checking accounts nationwide through Google Pay," said Elizabeth Fogarty, a Citi spokesperson.

"This agreement has the potential to expand the reach and breadth of our customer base while complementing our continued investments in digital, particularly our market-leading Citi Mobile app."