Google Shelves Plans for Bank Accounts in Revamped Pay App
(Bloomberg) -- Alphabet Inc.’s Google is shelving plans to add bank accounts to its payment app, becoming the latest tech giant to dial back its ambitions for financial services.
For years, Google has said it’s working on adding bank accounts from partners such as Citigroup Inc. and Bank of Montreal to its revamped app. The idea was that Google Pay users would be able to use the app to apply for so-called Plex checking and savings accounts from 11 banks.
“Our work with our partners has made it extremely clear that there’s consumer demand for simple, seamless and secure digital payments for online and in-store transactions,” a spokesperson for Google said in a statement. “We’re updating our approach to focus primarily on delivering digital enablement for banks and other financial services providers rather than us serving as the provider of these services.”
Google has tried, and struggled, to become a primary medium of commerce -- a goal that’s also proven elusive for rivals like Facebook Inc. The Plex accounts were just one part of a broad overhaul of the Google Pay app, which also allowed users to link up their existing bank accounts and credit cards and search for discounts when setting out to shop or dine. Since its debut in 2015, Google Pay -- originally called Android Pay -- has amassed 150 million users in 30 countries.
The Wall Street Journal previously reported on Google scrapping its bank-account plan.
Work on updating the Google Pay app -- which consumers mostly rely on to send money to friends or for online shopping -- began under Caesar Sengupta. He was vice president of the payments business and oversaw Google’s Next Billion Users initiative until his departure in March. Sengupta was replaced by Bill Ready, a former PayPal Holdings Inc. executive, in April.
By the time Ready took the reins, the Plex account project was behind schedule, according to a person familiar with the matter. A slew of noteworthy executives departed the company and rather than pushing ahead, Ready decided to abandon the effort.
Since leaving Google, Sengupta founded a financial technology company called Arbo Works, and has recruited several of his former colleagues in his effort to “to rethink an industry that is primed for change.”
Among his new employees are Felix Lin, the former vice president of partnerships for Google Payments; David Shapiro, the former chief business officer of Next Billion Users at the tech giant; and Edward Chiang, a former director of product management. In total, Arbo’s website lists a dozen employees -- in addition to Sengupta -- all of whom came from Google. That level of attrition made it harder to get Google’s Plex accounts off the ground.
Google’s decision is a loss for Citigroup, which had been touting the tie-up as evidence of its ability to forge digital partnerships with technology giants in its home country -- similar to those it has with the likes of India’s Paytm or Singapore’s Grab. The company vowed to use the technology it made for the partnership with Google in deals with other companies.
“We respect Google’s decision to update its strategy for Plex and look forward to finding other opportunities to work together, including as part of their payments ecosystem,” Citigroup said in a statement. “We also will use the learnings from this effort and the work we did to develop enhanced capabilities to accelerate Citi’s proprietary efforts and advance our work with partner ecosystems.”
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