Google will enter the financial system in 2020, confirming the boom in the entry of new technology-based companies to the sector. What implications does it have?
The project would become a reality thanks to Google’s agreements with Citigroup Inc and Stanford Credit Union, two traditional banks that would allow it to enter its technology and offer financial services to its users, who would access it through Google Pay.
Alphabet Inc., the parent company of Google, launched Google Pay in 2015 and has been searching for new ways to extend its functionality ever since. In this way, the first product that would be available is that of personal checking accounts.
In this regard, Caesar Sengupta, the company’s vice president for Payments, told The Wall Street Journal: “Our approach is based on in-depth cooperation with banks and the financial system.”
According to the executive, Google wants to benefit consumers and banks, by offering services that could include loyalty programs such as the exchange of points.
The great potential of Google in this regard lies in the fact that the company has valuable information from users such as how much they earn, where they buy and what their expenses are; data that gives you a good advantage over your competitors, but that cannot be shared or sold, thanks to data protection laws.
For its part, Facebook is preparing to put its digital currency “Libra” into operation, a project that has faced great criticism for sensitive issues for traditional regulators such as money laundering, cybersecurity and the security of users’ personal data.
However, the world’s largest social network, with more than 2.45 million active users, has already launched a unified payment service so that its users can carry out transactions without leaving the platform. The service is called Facebook Pay and is independent of the controversial Libra cryptocurrency project.
The increasing interest of technology companies to enter the financial ecosystem continues to boom. Such is the case of Apple, with its credit card; Amazon, which also wants to offer checking accounts or Mercado Libre, through the Mercado Pago platform.
In this way, large technology companies begin to tread on the heels of traditional banking with large infrastructures and digital developments that open the way to a new era, where not only financial institutions offer their services.