Tech giants are bailing out on in-house financial services innovation as they look to embed their offerings into third-party vendor platforms. 

“After nearly a decade or more of big tech companies venturing into launching their own financial products, many of the major players have now pulled back,” Laura Kennedy, principal analyst at think tank CBInsights, said during the “Big tech in fintech” webinar on Sept. 19.

Since 2020, Kennedy said, Amazon, Apple and Google have scrapped their fintech offerings one by one: 

• Apple discontinued its buy now, pay later installment payments service this year, one year post-launch; 

• Amazon halted efforts to offer cashier-less checkouts at its stores in 2023; and  

• Google pulled back on plans to offer bank accounts in 2021. 

Third-party strategy 

While the tech giants will still offer their core financial products, including Amazon Pay, Buy with Prime, Google Wallet and Apple Pay, they are now more keen on partnering and investing in third-party vendors to scale offerings and boost revenue, Kennedy said.  

“They’ve largely shifted to roles as tech providers, and they’re embedding themselves in financial transactions on other platforms and broadly supporting advances in financial infrastructure,” Kennedy said. 

Examples of how tech providers are integrating services into other platforms include: 

• Amazon embedded its Amazon Pay technology into Reserve Bank of India’s platform in February to provide instant payments to Amazon clients; and 

• Apple is working with vendors including Affirm to provide its customers with a buy now, pay later option. 

Google, however, is investing in fintechs to diversify its assets and grow revenue streams, Kennedy said. 

Google’s venture capital arms, including Google Venture, G Capital and Gradient Ventures, have backed 15 financial services companies since 2022, including: 

• London, U.K.-based digital bank Monzo; 

• Chicago-based spend management tool Forge; and 

• New York City-based SaaS provider for payment automation Gynger. 

“We’ve really seen an exceptional amount of activity when it comes to investment” from Google, Kennedy said, adding that the momentum is expected to continue.