Some time ago, Google announced a new service, called ‘Plex’, which would allow users to open bank accounts directly on Google Pay.
No bank accounts on Google Pay: Plex project conditioned by the banking system
To date, it is possible to link a bank account to Google Pay, but one must already have one. The aim of the Plex project was to allow Google Pay users to open a bank account directly on the app, thanks to a collaboration with some banks (Citigroup and Stanford Federal Credit Union).
Recently, however, Google has abandoned the Plex project, partly because it seems that the banking system is increasingly wary of technological giants such as Alphabet (Google’s holding company), Amazon or Facebook. Only Apple managed to successfully launch a credit card in 2019, thanks to Goldman Sachs, and is reportedly exploring a “buy now, pay later” product with the same bank.
The Plex account would have no monthly fees, overdraft charges or minimum balance requirements, and users would also be able to apply for a physical debit card active on the Mastercard network.
The traditional banking system may be concerned that these giants may end up competing too much with existing operators, or even engulf some services, especially those related to payments and consumer credit.
However, it is hard to imagine that Google, and the other big tech giants, will simply give up and agree not to cooperate with the current financial system to offer financial services to their users.
Google, Amazon and Facebook open up to new financial services
It is probably more likely that they will throw themselves into alternative projects, such as Facebook’s Diem, an entirely new payment system, developed internally and based on new technologies linked to the blockchain.
On the other hand, Google itself has been active in the crypto space for some time now thanks to a number of collaborations. Amazon too has been active for years, thanks to its blockchain solutions on AWS.
In the meantime, Twitter has decided to integrate bitcoin payments on the Lightning Network, so the path seems to be set.
If it is not the banks that will collaborate with big tech to enable them to offer financial services to their users, then it will probably be blockchain technologies that will enable these giants to create and offer their users new, and perhaps even more competitive financial services than traditional ones.
When the banking system, fearing excessive competition, withdraws from the world of big tech, it leaves a huge gap, which it is entirely possible that cryptocurrencies will fill.
Cryptocurrencies could therefore be a viable alternative to the traditional banking system in terms of deep, and perhaps native, integration within the large IT platforms now used worldwide by billions of people.
This process has already started this year, thanks to Twitter, and it is hard to imagine it stopping.