The Google Tez payments app launched by Google last year has seen enough traction. The numbers speak for themselves. More than 55 million users have downloaded the Tez app on their Android phones and iPhones. Google also says that more than 22 million individuals and businesses actively use the app for digital transactions every month. That combined, have clocked up to 750 million transactions over the year, which can be counted as high as worth US$ 30 billion. It linked up well with the push towards cashless transactions, for everything from buying groceries to paying for high-value purchases. Now, it is the next step for Google Tez. And that starts with the rebranding to Google Pay. This was announced at Google For India 2018 today, by the company.
The rebranding to Google Pay brings Google’s payment service in India in line with the same Pay payments service that it has in 20 countries around the world. And this is a rival for Apple’s Apple Pay digital payments service. Google had rebranded the Android Pay and Google Wallets service into Google Pay earlier this year, globally.
Swiss multinational investment bank Credit Suisse Group AG suggests that the Indian digital payments market will be worth $1 trillion by the year 2023, up from around $200 billion at present, according to the numbers released by Niti Ayog in July.
This move gives Google a head-start over Facebook’s WhatsApp, which rolled out a payments service for users in India. However, that has been stuck in the beta testing mode ever since and has faced regulatory hurdles as the Facebook owned instant messaging app has received multiple stern warnings from the government of India over the need to curb the sharing of fake and violence inciting messages on the platform.
Tez started out in life as a payments app linked to your bank, and allowed bill and utility payments too. Now however, there is a big push to make Google Pay more wholesome and with a much larger retail presence, online and offline—the existing features such as payments etc. remain as is. For starters, Google is pushing Pay into physical stores, which will enable you to pay using Google Pay on your phone at the billing counter. This will put Pay in direct competition with the likes of Paytm, which have carved out a presence for themselves in a large demographic of brick-and-mortar stores. Then there is the Samsung Pay app that works on the Korean smartphone maker’s phones and enables one touch payments in stores too. As things stand, Google will enable offline store payments later this year at large stores including Big Bazaar, e-Zone, and FBB, though no specific timelines are available at the moment. This will perhaps be the secret ingredient for Google Pay’s success in India, because the sheer reach in terms of branding and getting the message out to the potential user base will trump perhaps most advertising budgets.
Then there is the online store push as well, which will see Pay being integrated into a merchant’s app and allow a simple checkout process without having to switch apps. This is again in line with the global positioning and deployment of Google Pay. Google says that at present, you can use Pay to checkout after making a purchase at over 2000 online merchants, including Goibibo, FreshMenu, Nykaa, and will soon be expanding for integrations with many apps including Redbus, BookMyshow and Uber.
This is where Google Pay will face stiff competition from Amazon’s Pay wallet and Flipkart’s PhonePe wallet. Amazon and Flipkart, two of India’s largest stores, give their users access to their respective wallets—and that in many ways becomes the default payment mode on these shopping websites, even more so with the extra deals doled out for payments made via these wallets. Google will have to combat the volume of sales done on Amazon and Flipkart by simply bulldozing their way through to all possible apps, platforms and services, to get on the same ground as Amazon Pay and Flipkart PhonePe.
What really stands out is the upcoming feature that will allow banks to offer pre-approved and instant loans to their customers, from within Google Pay. At present, the details such as the maximum loan sanction values and which sort of loans can be approved for use via the app remain a bit sketchy—but safe to assume these will be micro-loans. Perhaps they will cover certain purchases and payments, but don’t expect to go around getting a car loan just yet. Google says that it is in talks with HDFC Bank, ICICI Bank, Federal Bank and Kotak Mahindra Bank for this. This feature rolls out to eligible account holders sometime in the next few weeks—you’ll get a notification, you choose how much to borrow, the terms of repayment and confirming. The bank will transfer the loan amount to your Google Pay linked bank account. If this feature reduces the headache of paperwork and a million phone calls, then it’ll be truly worth it. The terms of interest will be decided by the bank, and it’ll be interesting to see how that compares instead with making a transaction via your credit card and converting that to EMI.
At the time of writing this, the Google Tez app remains as is on our iPhone and has not yet been updated to Pay—and neither does the App Store indicate an update. Perhaps the update will roll out in a few weeks.
With the newest updates to Google Pay in India, it is hard to shrug off the feeling that Apple has perhaps left it a tad too late for launching Apple Pay in India. If at all it intends to. While it does have a somewhat captive audience of iPhone users who would find it convenient to sign up, but just like the instant messenger ecosystem, getting people to shift from what feels like a habit is easier said than done.
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