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Google joins mobile payments race in cash-reliant India
[BANGALORE] Alphabet's Google introduced a digital payments service specifically designed for India as competition heats up for the country's billion-plus potential users.
Tez, the Hindi word for fast, debuted Monday for download on iPhones and Android devices and joins an increasingly crowded field.
The service is compatible with the Indian government-backed Unified Payments Interface, which simplifies financial transactions and transfers of money between banks.
Users can pay directly from their accounts at major domestic banks including the State Bank of India, and transfer money to fellow Tez users without sharing personal details, Google said in an online statement.
Digital transactions in the country surged after Prime Minister Narendra Modi's government banned high-value bank notes in November, taking more than 85 per cent of the country's currency out of circulation.
The government has since boosted fintech with incentives and a string of initiatives such as digital lockers and user authentication based on its digital identity program, Aadhaar.
Google's new service goes beyond Android Pay by allowing the linking of payment apps from a clutch of Indian banks, as well as services of Paytm Payments Bank and One MobiKwik Systems.
While India remains a cash-dependent economy, the nascent digital payments sector is estimated to grow to US$500 billion by 2020, up from US$50 billion last year, PwC India said in a recent report.
Among those jostling to make inroads are Facebook's messaging service WhatsApp, which is in discussions with UPI's creator, the National Payments Corporation of India, for a service that's compatible with the interface.
Spam-blocker app Truecaller already offers in-app payments as does homegrown messaging service Hike, backed by Tencent Holdings and Foxconn Technology Group.
Several Indian banks have their own digital payments apps, which earn revenue by charging a percentage on each transaction. Paytm Payments Bank is set to introduce a money market fund that will offer interest to those holding cash in their Paytm accounts.
For Google, India is a vital market where several of its products, including its search engine, Android operating system and Maps have dominant market positions.
The Tez app supports several languages including Hindi, Bengali, Gujarati, Kannada, Marathi, Tamil, and Telugu.