Google Joins India’s Crowded Payments Market With ‘Tez’ App

Google launches Tez to tap India’s payments market.

An employee operates a electronic payment terminal at a musical instruments store in Bengaluru (Photographer: Dhiraj Singh/Bloomberg)
An employee operates a electronic payment terminal at a musical instruments store in Bengaluru (Photographer: Dhiraj Singh/Bloomberg)

Google Inc. on Monday launched a mobile payments application, Tez, for individuals and merchants as it joins India’s crowded digital payments ecosystem.

The application for Android and iOS devices is based on the National Payments Corporation of India’s unified payments interface launched in August last year. It allows customers to transact through a unique ID without having to share bank information.

Google has partnered with four large lenders, State Bank of India, HDFC Bank, ICICI Bank and Axis Bank, allowing customers with bank accounts to transact with 50 UPI-enabled lenders in eight Indian languages.

The tech giant is the latest entrant to India’s digital payments industry that’s estimated to grow to about $500 billion by 2020, a July study by Google and Boston Consulting Group said.

The boost came from demonetisation last year when nearly 86 percent of the currency was withdrawn. Card and digital payments spiked, but have since normalised. UPI transactions, however, continue to grow given the ease of making payments across banks. About 16.6 million UPI transactions worth Rs 4,130 crore were recorded in August compared to 0.3 million worth Rs 90 crore in November 2016.

Google Joins India’s Crowded Payments Market With ‘Tez’ App

Yet, non-bank companies offering UPI have been unsuccessful in trying to build a base as banks are protective of their customers and prefer that they use their own UPI services. As of now, Truecaller (in association with ICICI Bank) and chat application Hike offer UPI-based payments services. Samsung Pay, which uses near-field communication technology and magnetic stripe transmission to enable payments is also available on select Samsung devices in India.

“We believe the market in India isn’t crowded. We believe there is huge opportunity,” Diana Layfield, VP-Product Management at Google.

The great competition for us is cash and we’re another participant in building India’s digital ecosystem...l don’t think the (payments app) market is too crowded, nor is it too late to enter.
Diana Layfield, VP-Product Management, Google

Available To Businesses

Google’s Tez will be available for businesses, giving merchants their own business channel on the application so that they can engage directly with customers to share offers, send payment reminders, link to their mobile website or customer support.

The program will be initially open to businesses with an online presence and will expand to offline merchants in the coming months. PVR Cinemas and redBus are already integrated at launch. DishTV, Jet Airways and Domino’s will come on board in the coming weeks.  
Google Statement 

Google’s information about an individual’s preferences can play a good role in enabling business to know their preferences and provide offers with interesting options, market research firm Gartner said in an emailed statement.

Eventually, UPI payments will have an upper hand if it continues to remain free and provide better security, convenience and add more value added services. It will all depend on how fast Google can build ecosystem of partnerships around it and continue to sustain innovations.
Gartner Statement

Unlike other UPI-based payment apps, Tez connects to the customer’s bank account rather than act as a separate wallet. The payments application comes with some initial offers to attract users.