OBSERVATIONS FROM THE FINTECH SNARK TANK
The Wall Street Journal announced that Google is abandoning plans to offer the Google Plex checking account, announced in November 2019. According to the WSJ:
“A Google spokeswoman said the company would now focus primarily on delivering digital enablement for banks and other financial services providers rather than us serving as the provider of these services.”
Consumers Showed Strong Interest in the Google Plex
A study of US consumers conducted earlier in 2021 by Cornerstone Advisors and Strategy Corps gauged consumers’ interest in Google Plex features and their intentions to open a Google Plex account.
Interest in a number of Google Plex features garnered strong interest among Gen Zers and Millennials, including “Get gas” and “Get food” buttons that would help users find the nearest gas station or restaurant and automatically pay for the purchases.
The Google Plex account could have made a dent in the banking market. Nearly one in five consumers said they would have opened a Google Plex account when it launched. Among Apple Pay and Google Pay users, 33% said they would open an account.
BankMobile and Green Dot Stood To Win Big
The original game plan was to ask Google Plex applicants which of the financial institutions partnering with Google they wanted to associate their Plex account with.
The two digital banks that Google partnered with—BankMobile and Green Dot—stood to gain a disproportionate percentage of applicants with a third of would-be Google Plex applicants indicating that they would choose one of the two digital banks.
The news of the scuttled Plex account appeared to be a surprise to BankMobile (now called BM Technologies). According to the WSJ report:
“As late as this week, several banks were under the impression that the project would still move forward. On Monday, BM Technologies said its Plex accounts would arrive in late 2021 or 2022. “Google and BMTX are excited about this opportunity and are committed to this partnership,” the banking platform said in an email at the time.”
In addition, according to the Wall Street Journal, Citibank has more than 400,000 consumers on its waiting list for the new account
Google Still Wants to Be a Fintech Vendor
The WSJ reported that Bill Ready, who runs Google’s eCommerce operations, “was concerned that Plex could make other banks think that Google was out to compete with them since it played a lead role in building the product.”
That’s not entirely the case.
In a study conducted by Cornerstone Advisors, which surveyed executives from small and mid-sized banks and credit unions, one in four respondents said they were either evaluating a Google partnership, planning to talk to Google about a partnership, or already talking to the Big Tech about partnering.
And of course, there were already 11 announced partners.
My bet is that Ready was referring to some of the large banks that Google is courting to provide cloud and AI computing services to.
Resistance from Bank of America, JPMorgan Chase, Wells Fargo, and a handful of other large regional banks may have been enough to convince Google to back off.
But neither Ready nor the Wall Street Journal) mentioned another factor that may have influenced Google’s decision to kill the Plex account.
Ars Technica cited a report in Business Insides that the Google Pay team was in “major upheaval after botched app revamp:”
“Business Insider spoke with ex-employees and learned that dozens of employees and executives have left the Google Payments team in recent months, including at least seven leaders on the team with roles of director or vice president. One of the employees Business Insider spoke to said, ‘Plex was entirely [Vice President] Felix [Lin’s] and Caesar [Sengupta's] brainchild,’ and now both of those executives no longer work at Google. Progress on the bank account has already been ‘slower than expected,’ according to the report, and without its two leading architects, Plex may be delayed."
Delayed just became killed.
And with it, the hopes of a number of mid-sized financial institutions to offer what could have been a killer digital checking account.
