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Google takes on Monzo and Revolut with digital banking plans

Matthew Field
Google logo - REUTERS

Google plans to offer current accounts to US customers in a deal with Citi, becoming the latest big Silicon Valley company to take aim at retail banking.

Its digital bank account app codenamed Cache, to be launched next year, could present a new challenger to start-ups such as Monzo and Revolut

Google Cache will start out as a digital current account for personal payments and bills.

The move follows the August launch of the Apple Card, a credit card from the iPhone maker. Apple has been working with Goldman Sachs on the card, which offers rewards and cashback and zero fees on many services.

Facebook, meanwhile, has added a new Facebook Pay service to its social network, Instagram and WhatsApp apps in the US, designed for users making small payments or money transfers or for online shopping.

Google users can already make payments using a linked credit card on Android mobile phones with the Google Pay app. The service is expected to have 100 million users by next year.

It previously had a payments app called Google Wallet that was later merged into Google Pay.

Customers using Cache would access their account through Google Pay. 

Caesar Sengupta of Google told the Wall Street Journal the company would leave the back-end of the current account apps to banks, meaning it will not need a banking licence. 

“Our approach is going to be to partner deeply with banks and the financial system,” he said. “It may be the slightly longer path, but it’s more sustainable.”

Mr Sengupta added that Google would not sell financial data from the app. Google does not use data from its Pay app for advertising.

The push into financial services could make Google a new rival to the challenger banking apps that have emerged in recent years, many of which rely on convenience services such as peer-to-peer payments, money management services or cheap transfers.

Monzo has signed up more than 2m users to its digital banking app, while Revolut claims more than 7m.

According to a report from Accenture, digital-only banks are expected to treble the size of their customer base within 12 months to more than 35m people.