Google’s threat to neobanks escalates with Google Pay update
The tech titan has rolled out a slew of new features, including options for finding deals at Safeway and Target, paying for transit, and tracking expenses to further anchor Google Pay in users’ lives, through TechCrunch. Among these updates, an improved “Insights” tab gives customers who link their bank accounts to Google Pay the ability to check their balances, view upcoming invoices, and set alerts for larger transactions. Google now automatically categorizes customer transactions, allowing users to track their spending by category or by specific business.
The Google Pay upgrade comes as another big brand, Venmo, is expanding its banking services. Venmo’s parent company PayPal said in its fourth quarter 2020 results that the mobile payment app will get a series of upgrades, including support for buying and selling cryptocurrencies. , a savings function and budgeting tools, through TechCrunch. And these are just the most recent additions to a body of features, including a debit card (launched in 2018), credit card (launched October 2020), and a mobile check cashing feature, which has debuts in January of this year.
As tech powers with huge brand recognition deepen their banking business, targeted customer acquisition and retention strategies will be absolutely critical for US neobanks. A full push into banking services by companies like Google and Venmo has the potential to be catastrophic for neobanks like Chime and Varo. Neobanks don’t have the same brand recognition as their incumbent banking counterparts, but they are looking to differentiate themselves by leveraging their digital prowess to create top-notch digital customer experiences. But Google and Venmo have even more expertise in creating digital user experiences, and they enjoy titanic brand recognition and existing user bases that they can market for free. Current Venmo User based comes in at a colossal $ 70 million, and when it comes to Google, there are around 131.2 million Android devices in the United States users, not to mention consumers who use the Google search engine. As the banking services of these two giants rise, it will become increasingly important for neobanks to market aggressively to maintain customer acquisition. growth strong and to maintain the facets of their offerings – such as the anticipated salary access or high savings rates—Which drive customer loyalty by keeping their existing customers happy.