• by Laurie Sullivan  @lauriesullivan, November 13, 2019

Google plans to offer banking services in 2020, with Citigroup and Stanford Federal Credit Union running the project.

“We’re exploring how we can partner with banks and credit unions in the U.S. to offer smart checking accounts through Google Pay,” said a Google spokesperson. It should help “their customers benefit from useful insights and budgeting tools, while keeping their money in an FDIC- or NCUA-insured account.”

Partner banks and credit unions will begin offering Google smart checking accounts in 2020 through Google Pay, according to a reliable source. 

The move, first reported by The Wall Street Journal, suggests that Google is setting its sights on checking accounts -- a commoditized product -- and loyalty cards. They hold a wealth of information such as annual income, shopping habits and how bills are paid, and reveal whether or not the person lives within their means.

When a user signs up for a Google account, the use of their data will be clearly outlined in agreements and disclosures from both Google and the partner bank. In the U.S., banks are required to collect and retain user data associated with running and maintaining bank accounts and securing user transactions.

Google and partners will work closely to ensure users remain in control of their data and uphold standards for privacy and security.

The Google Pay team has been working for years to help make money simple and accessible for users in close partnership with banks, credit unions, and the existing regulatory and financial systems.

In the U.S., more than 2,000 banks offer virtual card transactions via Google Pay. In India, Google has noticed how fast and secure mobile payments can contribute to growing economic opportunities.

It’s all about the data, said Kevin Lee, executive chairman of Didit. He suggests that everyone read their privacy disclosures from credit card companies.

“Knowing all the things a bank knows about a consumer isn’t just useful to know for conversion rates and purchase behavior, but it also provides targeting data that will make marketing and advertising more effective,” he said.

“Knowing all your browsing activity may allow for a more accurate calculation of credit risk, reducing the costs of lending and credit card defaults.”

If a consumer transacts through Google or the payment comes from a Google account, then Google can tell which types of Google media drove the transaction -- even offline, such as in a store -- if Google offers a credit or debit cards and some extension of Google Pay, explains Lee.  

The key is knowing the browsing and purchase patterns of consumers, and understanding these may reduce fraudulent card transactions as well as the problem of bots, both online and off.

For offline, imagine that a consumer's phone can be in San Francisco and communicate to Google via the maps app, with a card-swipe in person that occurs at the Miami International Airport.