How To Create A Google Group Account

Are You Ready For a Google Checking Account?

Shares of Google (NASDAQ:GOOGL) stock continues to rise. This time the stock market is applauding Google's push into the financial services space. The tech giant recently announced it will begin offering checking accounts starting in 2020.

The convergence of finance and technology (known as fintech) has been around for a while. In fact, the lines between what customers can do at a bank and via alternative sources like PayPal (NASDAQ:PYPL) is blurring. Google is taking an even larger step into the fintech space. The initiative, called Cache, will expand Google's fintech offerings that already include Google Pay and Google Wallet.

There will be no "Bank of Google"

Let's be clear about one thing. Google is not interested in becoming a bank. Instead, Google is partnering with existing banks and credit unions to launch Cache. The financial institutions will bear the responsibility for the financial and regulatory approvals.

Google is not the first big tech company to enter the financial services space. Apple (NASDAQ:AAPL) recently launched its Apple Card. Amazon (NASDAQ:AMZN) is also working with financial institutions to explore offering checking accounts. And Facebook has made waves with its intention to launch a digital currency, Libra.

However, unlike Apple that does not prominently announce their affiliation with Goldman Sachs (NYSE:GS) on its Apple Card, Google plans on making the involvement of their partner institutions prominent in the launch of Cache. Google's initial partners will be Citigroup (NYSE:C) and Stanford Federal Credit Union.

"Our approach is going to be to partner deeply with banks and the financial system," Caesar Sengupta, general manager and vice-president of payments at Google, told the Wall Street Journal. "It may be the slightly longer path, but it's more sustainable."

For their part, financial institutions see their association with Google as a way to attract younger, tech-savvy consumers who are actively seeking ways to handle more of their lives with online tools. The thinking is once they have these customers, the financial institutions will be able to leverage Google's ability to work with large data sets to create and offer value-added products.

However, Google is being clear that they don't use their existing Google Pay data for advertising and they don't share it with advertisers. But will consumers believe that?

It's a matter of trust

Alphabet (the parent company of Google) is one of the "big tech" companies that find itself in the crosshairs of government regulators. This includes indications that the company may be subject to a Department of Justice (DOJ) antitrust probe.

However, as much as consumers express concerns about their personal data being compromised, many consumers – particularly millennials - have little or no misgivings about eschewing a traditional bank in favor of Google.

In fact, in a recent McKinsey & Co. survey, 58 percent of respondents said they would trust financial products from Google. Only Amazon scored higher.

Already, PayPal and Apple are already making it easy for consumers to get an array of services that would normally be left to a traditional bank. PayPal, for example, has its Personal Capital program in which small business owners can receive small business loans completely based on their sales activity. There's no credit check and repayment is automatic every time the company has an invoice repaid.

Services like Google Pay and Apple Pay are making it even easier for consumers to walk away from their personal banking relationships.

But another reason is a little more black and white. Millennials have come of age in the post-financial crisis era. In some cases, they have witnessed the struggles their parents have had with traditional banks. And they see companies, like Google and Apple, as being better capitalized (and therefore less risky) than traditional banks.

When you come right down to it, consumers are saying they are more likely to trust Google then a bank.

What does this mean for Google stock?

In the short term, I wouldn't make the possibility of Google offering a checking account your primary reason to buy or sell Google stock. A checking account is fairly low hanging fruit, and consumers don't frequently change their checking account very frequently. Google will certainly capture some early adopters, but it remains to be seen how much traction this effort will get.

For right now, investing in Google should still be primarily about its core business, which remains strong.

In Alphabet's (the parent company of Google) fourth-quarter earnings report, the company announced revenue of $40.5 billion which was in line with analysts' expectations. But the company's earnings per share came in slightly lower than expected. Part of this earnings miss was a sharp decline in paid clicks, the area where Google makes its most money. On a year-over-year basis, that area showed an 18% growth as opposed to 62% in 2018. The news wasn't all bad. Google's "cost-per-click" (i.e. the revenue it receives from each click) only dropped 2% as opposed to the 28% drop year-over-year.

However, since the earnings report, Alphabet shares have been rising and the stock is now up over 23% for the year. This means the stock continues to closely track with the S&P 500 Index.

7 Tech Stocks That Are Heating Up as Anti-Trust Talk Cools Down

For the better part of the last year, Congress has had "big tech" in its crosshairs. But the reasons why largely depend on what side of the aisle a particular individual was on.

On the one hand, there are politicians who are concerned about the role that technology companies play in restricting the free flow of information. On the other hand, there are politicians that are concerned about these companies' stranglehold on competitors and innovation.

But big tech scored an important, albeit not final, victory in late June. At that time, a U.S. judge dismissed two separate complaints against Facebook (NASDAQ:FB). The question in front of the judge was whether Facebook held a monopoly on social media. Due to a surge in the company's stock price after the ruling, Facebook became a member of the exclusive $1 trillion market cap club. While big tech companies will remain under the Congressional microscope, there's no denying that investors are looking at the ruling as a signal to rotate back into tech stocks. And that's the focus of this presentation. What tech stocks should you be buying as anti-trust pressure eases?

It would be easy to start and end the list with the FAANG stocks. After all, the motto "Keep it Simple Stupid" comes to mind. There are simply those companies that offer products that are changing our lives now and will continue to do so in the future. And furthermore, customers will continue to pay for their products.

And I do have a couple of these stocks on my list. But the bulk of the stocks on this list are less expensive alternatives to at least one of the FAANG stocks. It doesn't mean they're superior companies, but a rising tide tends to lift all boats. And that means these companies have a large upside and you can purchase the stocks for a lot less.

View the "7 Tech Stocks That Are Heating Up as Anti-Trust Talk Cools Down".

Companies Mentioned in This Article

Company	MarketRank™	Current Price	Price Change	Dividend Yield	P/E Ratio	Consensus Rating	Consensus Price Target
Alphabet (GOOGL)	1.9	$2,926.04	-1.8%	N/A	28.18	Buy	$3,185.32
PayPal (PYPL)	3.0	$189.48	-2.1%	N/A	45.55	Buy	$283.64
Amazon.com (AMZN)	2.3	$3,572.57	-2.8%	N/A	69.89	Buy	$4,158.21
Apple (AAPL)	2.7	$161.02	+0.3%	0.55%	28.65	Buy	$165.89
The Goldman Sachs Group (GS)	2.6	$396.16	+2.3%	2.02%	6.53	Buy	$422.53
Citigroup (C)	3.1	$67.04	+1.1%	3.04%	6.27	Buy	$81.84