Google Pay’s checking accounts service may give banks an edge in deposit wars | Tech News

Google Pay’s checking accounts service may give banks an edge in deposit wars

Deposit growth at the biggest US banks slowed to 2.2% last year, the lowest level since 2010, according to data compiled by Bloomberg Intelligence

By: JENNY SURANE
| Updated on: Aug 20 2022, 18:00 IST
Consumers have increasingly flocked to newer, digital-only banks that come with flashy mobile apps and often offer higher interest rates for their savings
Consumers have increasingly flocked to newer, digital-only banks that come with flashy mobile apps and often offer higher interest rates for their savings (Google)

Google's new checking account service could help banks in their battle for consumer deposits.

The technology giant said last week it's exploring how it can partner with banks to offer checking accounts through its Google Pay app. Citigroup Inc. and a California credit union signed on as initial partners for the effort -- a move that could help them pick up extra customers as the industry contends with slowing growth in deposits.

You may be interested in

MobilesTablets Laptops
2% OFF
Google Pixel 7 5G
  • Obsidian
  • 8 GB RAM
  • 128 GB Storage
2% OFF
Google Pixel 128GB
  • Black
  • 4 GB RAM
  • 128 GB Storage
48% OFF
Samsung Galaxy S22 Plus
  • Green
  • 8 GB RAM
  • 128 GB Storage
5% OFF
Google Pixel 6
  • Stormy Black
  • 8 GB RAM
  • 128 GB Storage

"It's a war for deposits," Betsy Graseck, an analyst at Morgan Stanley, said in a note to clients Friday. "An opportunity to deliver value to corporate customers and pick up incremental checking accounts as well is a good business decision."

Also read
Looking for a smartphone? To check mobile finder click here.

Deposit growth at the biggest US banks slowed to 2.2% last year, the lowest level since 2010, according to data compiled by Bloomberg Intelligence. Consumers have increasingly flocked to newer, digital-only banks that come with flashy mobile apps and often offer higher interest rates for their savings.

Citigroup has been making a push for consumer deposits after it debuted its national digital bank and restructured its US consumer operations last year, bringing Anand Selva from the firm's Asia business to lead the new unit. Average deposits in the firm's US retail banking arm have climbed 2.9% this year to $186 billion.

With the Google partnership, Selva is leaning on a playbook he learned in Asia, where Citigroup has forged partnerships with consumer companies including Paytm, India's largest payments platform, and Grab, the ride-hailing app in Southeast Asia.

Banks will essentially be using Alphabet Inc.'s Google as a method for adding customers, "kind of like how airlines act as an account acquisition tool for credit cards," Graseck said in her note. "This is not attaching your current checking account to Google Pay. It must be a new checking account."

For Google, the bank partnerships will give the tech behemoth a better ability to show advertisers how marketing dollars spent on its system can drive purchases, according to Graseck. In a Morgan Stanley survey, consumers expressed high levels of confidence in Google's ability to offer banking services, she said.

Catch all the Latest Tech News, Mobile News, Laptop News, Gaming news, Wearables News , How To News, also keep up with us on Whatsapp channel,Twitter, Facebook, Google News, and Instagram. For our latest videos, subscribe to our YouTube channel.

First Published Date: 18 Nov, 17:16 IST
NEXT ARTICLE BEGINS