MOUNTAIN VIEW, Calif.–Google plans to begin offering checking accounts in 2020 and is partnering with Stanford Federal Credit Union and Citibank on the initiative. Representatives of NAFCU have already met with Google executives to discuss what the announcement might mean for credit unions.
According to the company, Google will not be front-and-center on the offering and instead the Stanford FCU and Citi brands will be consumer facing, with the financial institutions responsible for all of the back-end operational support and compliance. Partner banks and credit unions will offer these smart checking accounts through Google Pay. Google also hasn’t decided whether the accounts would charge fees, according to CNN Business.
Google, which said it plans to expand beyond Stanford FCU and Citibank in the future, already has more than 2,000 banks offering virtual card transactions via Google Pay, the company said. Stanford Credit Union in Palo Alto, Calif., is approximately eight miles from Google's headquarters.
“We’re exploring how we can partner with banks and credit unions in the U.S. 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,” a company spokesperson told CNN Business.
Long an Issue of Discussion
There has long been discussion within credit unions over when, not if, the major technology companies would expand their presence in financial services. Apple is already well into its Apple Card offering, for instance, on which it has partnered with Goldman Sachs.
One analyst told CNN Business Google’s initiative likely won’t cause big banks any concern for now, but “Big Tech’s ongoing expansion of its financial footprint will likely pose a competitive threat in the future — especially as it shows no signs of letting up.”
In addition, the report also noted it's likely lawmakers in Washington will also increase their scrutiny of the big tech companies as their expand their services. “We have trouble seeing how combining the two is going to produce an outcome that either Democrats or Republicans will embrace,” Jaret Seiberg, an analyst at Cowen and Company, said in an analyst note, CNN Business reported.
NAFCU Meets With Company Reps
Meanwhile, in Arlington, Va., NAFCU President and CEO Dan Berger and Executive Vice President of Government Affairs and General Counsel Carrie Hunt met with Google executives at the organization’s headquarters to discuss the implications of the announcement.
"In an effort to protect our member credit unions' interests, NAFCU met with Google executives to discuss the tech company's checking account efforts and its potential impact on credit unions and the 118 million consumers they serve," Berger said. "While we believe it is extremely important that our industry continue to explore innovative solutions, NAFCU will always work to protect credit unions and ensure any developments in the marketplace do not disrupt their ability to compete and serve their members.
"We will hold additional meetings with Google and other payment system stakeholders to assess the value and challenges this new partnership may bring," he added.