- Google has teamed up money transfer firms Wise and Western Union on the payments feature.
- The World Bank forecasts that remittances into low- and middle-income countries were worth $508 billion in 2020.
- Google, Apple and other tech giants have been pushing deeper into the financial services sector.
Google is jumping into the massive remittances market.
The tech giant's mobile payments service Google Pay announced Tuesday that users in the U.S. will now be able to send money to India and Singapore.
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The company has teamed up money transfer firms Wise and Western Union on the feature, integrating their platforms into the Google Pay app. Users can choose between Wise or Western Union to move their money abroad. Google will take a small cut of the cross-border transactions made through its app.
Google Pay launched a new version of its app in the U.S. last year, marking a push into banking services with the addition of checking accounts from lenders like Citi, as well as rewards and budgeting insights.
Google is one of many large tech firms pushing deeper into the financial world. Apple launched its own credit card in partnership with Goldman Sachs in 2019. Facebook is making a number of moves in digital currency and payments. In China, Alibaba affiliate Ant Financial and Tencent have become formidable players in the digital payments space.
Still, these Big Tech companies have no apparent ambitions to become banks.
"We're not planning to become a bank or a remittance provider," Josh Woodward, Google Pay's director of product management, said in an interview with CNBC. "We work with the ecosystem that already exists to build these products."
Google's latest financial services push will see it enter the huge remittances market. The World Bank forecasts that remittances into low- and middle-income countries were worth $508 billion in 2020. That's actually down 7% from 2019, a decrease the bank attributed to the Covid pandemic's impact on migration.
The news is a big win for Wise. The London-based fintech firm, formerly known as TransferWise, is increasingly selling its platform as a service to banks like France's Groupe BPCE, Britain's Monzo and Germany's N26. Rival Western Union has been upping its digital strategy lately to ward off upstarts like Wise and WorldRemit.
Going forward, Google wants to expand its remittances feature into the 80 countries Wise operates in and, eventually, the 200 nations Western Union covers.