Newsroom

November 22, 2019

ICYMI: Google shares checking account plan with NAFCU

Technology companies are increasingly seeking ways to enter the financial services marketplace, and Google last week detailed its intentions to start offering checking accounts during a meeting at NAFCU's headquarters with association President and CEO Dan Berger and Executive Vice President of Government Affairs and General Counsel Carrie Hunt.

Berger said NAFCU held the meeting with Google executives "in an effort to protect our member credit unions' interests" and determine how the checking accounts could impact the credit union industry and its 118 million members.

"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," Berger said. "We will hold additional meetings with Google and other payment system stakeholders to assess the value and challenges this new partnership may bring."

The tech company told NAFCU that it is partnering with Citigroup and Stanford Federal Credit Union to offer the checking accounts through its Google Pay app, though additional banks and credit unions would likely have the opportunity to join later.

Unlike traditional methods of opening an account with the financial institution, consumers would open the checking account with Google through Google Pay. Google would be responsible for collecting all necessary paperwork as required for account opening and Know Your Customer, but financial institutions would still be responsible for financial and compliance activities related to the checking accounts.

In addition, the checking account and associated debit card would be Google branded – not the financial institution providing the products. As this is intended to be an online-only checking account, consumers wouldn't have access to physical branches of the bank or credit union.

Google explained to NAFCU that it does not intend to charge financial institutions for offering the checking accounts, but would likely make money from debit card transaction fees. It would also allow peer-to-peer money transfers through the Google Pay app.