Alphabet’s Google said on Wednesday it will offer personal checking accounts next year through its Google Pay app, initially in partnership with Citigroup and a small credit union at Stanford University.
The project, codenamed Cache, comes as rivals Facebook and Apple are expanding their own efforts in consumer finance, a broad area that ranges from digital payment apps to bank accounts, brokerage accounts and loans, and which offer Silicon Valley new sources of revenue and new opportunities to strengthen ties with users.
US regulators and lawmakers have expressed concern about how those companies’ massive influence and poor records on data privacy will play out as they try to gain ground in finance. The scrutiny most recently prompted Facebook’s partners to pull back from plans to support the launch of a digital currency.
Google said it has held initial talks with regulators, though it declined to specify which ones, about compliance issues related to the new checking accounts.
Asked about Google’s plans, US Senator Mark Warner, a Democrat on the Senate panel that oversees banking, expressed reservations.
“There ought to be very strict scrutiny,” Warner told CNBC about tech giants such as Facebook or Google entering new fields before rules governing them were in place.
Google spokesman Craig Ewer said the company’s lead partners were Citi and Stanford Federal Credit Union and that more details would be known within months.
“We’re exploring how we can partner with banks and credit unions in the US to offer smart checking accounts through Google Pay, helping their customers benefit from useful insights and budgeting tools, while keeping their money in an FDIC or NCUA-insured account,” Ewer said in a statement, referring by acronym to two US agencies that insure deposits.
Stanford Federal and Citi confirmed their roles