Google Pay overhaul adds in-app banking with Citi, Stanford FCU and others

Google has redesigned Google Pay to add new financial management and loyalty features; and to offer consumers checking and savings accounts from partner banks and credit unions in 2021.

The new Google Pay features are centered on three areas: a Pay tab for purchases and P2P payments; an Explore tab for rewards and offers; and an Insights tab that enables spend tracking and receipt management. The app will also let users create a Plex account, which is a mobile-first bank account that is integrated into Google Pay and will be offered by banks and credit unions with no monthly fees, overdraft charges or minimum balance requirements.

“This version has been in the works for a year a half," said Venkat Rapaka, vice president of product management of Google Pay at Google. “The app is a privacy-forward design with strong security built-in. For example, what’s new is to have fingerprint and facial biometric authentication in addition to PIN and password options. GPay adds a lot of features that consumers will find very helpful in managing their money.”

Google announced in November 2019 that it had partnered with Citi and Stanford Federal Credit Union (SFCU) to offer Google checking accounts in a gambit to drive increased engagement with consumers as well as to make banking more affordable and accessible. Starting in 2021, Google Pay will be offering users the ability to apply for Plex accounts that have checking and savings from 11 different banks and credit unions, including minority-owned depository banks, in the U.S. Among the additional banks are Bank Mobile, BBVA USA, BMO Harris, Coastal Community Bank, First Independence Bank and SEFCU.

Initially, consumers can join a waitlist on the app to apply for a Plex Account from Citi or SFCU. Over the course of 2021, the other banks will be added as options for consumers.

Other companies have experimented with allowing bank account management in third-party apps, such as how Barclays allows users of its Uber credit card to apply for and manage the account from Uber's app.

Google is emphasizing privacy in how its app functions. For example, the Pay tab allows users to split a lunch check like they would with Venmo, but unlike Venmo's social emphasis, all Google Pay payments are private.

“One important change has been to give the user more control,” added Rapaka. “For example, when you sign up for Google Pay you choose whether you’d like to use your transaction history to personalize your experiences in the app. The setting is set to off. You can turn it on and try it for a while and then if you want to, just turn it off. This is the key to providing consumers with more control.”

The Explore tab also focuses on privacy, according to Josh Woodward, director of product management of Google Pay U.S. at Google."Businesses are excited since there’s a setting inside Google Pay to choose if you want personalized offers or not. The initial setting is set to off so we make users opt-in," Woodward said.

Rapaka noted that for existing Google Pay users the redesigned app will be a new install, since Google wants users to be aware of the opt-ins and other features.

The new app will also borrow some of its design from Gmail. By default, users see only the last eight payments made within the app, displayed with icons. Once the user clicks an icon, Google Pay displays all of the debits and credits made in the past, similar to an email thread in Gmail.

According to PaymentsSource Future of Money Survey published in November 2020, adoption of mobile wallets — such as Google Pay, Apple Pay and Samsung Pay — is just over one quarter (28%) of U.S. adults with millennials having the highest level of adoption at 42%. Despite such broad-based usage among consumers, only 2% of consumers had used mobile wallets as their primary method of in-store payment prior to the pandemic.

In the six months since the pandemic, about 30% of consumers have changed their primary in-store payment method and of those, approximately 15% have made a mobile wallet their preferred payment choice. This is a clear indication that mobile wallets, such as Google Pay, have benefited from growing consumer concerns about payments safety during the crisis.

In a related move, Mastercard announced earlier this week that it would extend the Google Pay service to its cardholders across Austria, Bulgaria, Estonia, Greece, Hungary, Latvia, Lithuania, Netherlands, Portugal, and Romania together with its issuing partners. Google Pay will be available for both online and in-store contactless usage.