US consumers will be able to start signing up for checking accounts from within Google Pay in mid-2020, Google has told the Credit Union National Association (CUNA).
Google plans to make the accounts available free of charge, in partnership with credit unions and other financial institutions, and to generate revenues from debit card transaction fees.
“Google does not plan to charge financial institutions for offering a Google checking account, although it expects to generate revenue through debit card transaction fees,” the CUNA advocacy team reports. “The account will also offer P2P money transfers through Google Pay.
“Google Pay also intends to incorporate advanced financial features it believes credit unions might not otherwise be able to provide in their applications.”
“Google is partnering through the first stages of development with Stanford Federal Credit Union and Citibank, but will likely add more partners as development progresses,” the team adds.
“Google’s product will be a checking account and only a checking account (at least for now) that is accessed through Google Pay, which will be very similar to the way credit cards are accessed through the Google Pay app.
“There will be one major difference, however. Checking accounts will be designed to work specifically with Google Pay, meaning they must be opened by Google through Google Pay.
“They will be accessible only through Google Pay as well as a Google-branded (or possibly co-branded, with the financial institution) debit card.
“Google staff said they do not envision account holders having access to the financial institution’s branches with the Google checking account; it is intended to be an online account only. Google also mentioned that they want the checking account to be free.”
“A consumer wishing to open a Google checking account will do so through Google Pay,” the CUNA explains.
“During the account opening process, the consumer will choose the credit union or bank to hold the account.
“During the opening process, Google will collect and process all documents necessary for account opening and Know Your Customer requirements.”
News of Google’s plan, codenamed Cache, was first revealed by The Wall Street Journal last week. Partner banks will handle “all financial and compliance activities related to the accounts,” according to the report.