Ireland's central bank has granted authorisation for Google to operate as a payments institution, a move that could see the big tech giant significantly expand its financial services offerings across the European Union.
The central bank's decision to authorise Google Payment Ireland under the second Payment Services Directive (PSD2) does not grant Google with the ability to offer a full banking service including bank accounts and loans but it will be able to acquire and issue payments anywhere in the EU under passporting rights.
Currently Google's primary payments product is its digital wallet Google Pay, which offers a limited number of financial services. The introduction of PSD2 is designed to bring more competition to the payments sector, particularly among non-traditional bank. Consequently there has been a significant rise in the number of neo-banks and big tech firms seeking regulatory approval to operate banking and payment services.
Facebook was granted an e-money licence by the Irish central bank two years ago, although it has yet to fully develop its payments offering. Meanwhile Amazon has also made statements about taking on the banks' hold on payment services.
However, Google executives have previously said that the company is more interested in working with banks to develop opportunities in the payments market rather than looking to compete.
In addition to the competition between banks, neo-banks and big tech firms, there is also a developing rivalry between European domiciles to attract some of these prospective payment companies by offering them licences. In addition to its Irish authorisation, Google has also been granted a full e-money licence by the central bank of Lithuania, the 39th it has granted so far, second only to the UK which has issued 128.
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