Removing Barriers Blog

Google Discusses Checking Accounts in Visit With CUNA
Posted November 14, 2019 by CUNA Advocacy

Yesterday, Google staff visited CUNA’s Washington, DC office to discuss the technology company’s plans to partner with credit unions and banks to offer checking accounts through Google Pay. Google also made news yesterday when these plans became public through several news stories providing some details on Google’s proposed partnership with credit unions. 

Google provided details on the product that they are developing along with a timeline of when a Google co-branded checking account would be available to the public. 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.  Google’s goal is to make the product available to consumers in mid 2020.

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.

Google did not provide details on the specific requirements they would place on financial institutions offering a Google checking account, but one can imagine that given Google’s branding all accounts will be expected to function very much the same because Google will want uniformity of operations. As mentioned above, a consumer wishing to open a Google checking account will do so through Google Pay. 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.

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 account will also offer P2P money transfers through Google Pay.

It’s clear that many technology companies want to offer banking services. One only has to look to Facebook’s Libra and Rakuten’s charter request to operate an industrial loan company (ILC) to see technology companies’ desire to either provide financial services or play a role in the delivery of financial services. Google’s approach of working with financial institutions could offer benefits for credit unions.  Google Pay also intends to incorporate advanced financial features it believes credit unions might not otherwise be able to provide in their applications. 

CUNA does have major concerns about privacy. Google stated that it would not sell consumers’ financial information- Gramm Leach Bliley Act (GLBA) privacy restrictions would likely prohibit this anyway.  Some consumers might also feel uncomfortable with Google’s access to their financial information and transaction data and potential to use it for other purposes. This is a legitimate concern, but such consumers could instead open a regular checking account at a credit union, which would not share information with Google.

We expect that Google will add more credit unions and banks as it continues to develop the checking account.  CUNA will also continue to work with Google to ensure that the Google checking account and account opening process is compatible with credit unions and credit union membership requirements.  

Please contact Lance Noggle, Senior Director of Advocacy and Senior Counsel, if you have questions or comments.