Reports have recently emerged that Google is planning to launch its own mobile payments service in India in the near future. Dubbed as “Google Tez“, the new service will be an India specific service at launch but might be expanded to other countries like Indonesia and Philippines in the future.
Google’s entry into the mobile payment services space in India is no surprise. The events of the past year have brought digital payments to the forefront in this region, and the market has tremendous growth potential. A while back, we reported that Google was attempting to integrate the United Payments Interface (UPI) with Android Pay. It seems that Google Tez is a direct consequence of those efforts.
Google Tez will reportedly be supporting other payment services including Paytm and MobiKwik. However, it is not immediately clear whether Google Tez will allow users only to transfer money from other wallets or it will allow Tez users to pay through the supported payment services.
Google Tez In India: Tapping $500 Billion Industry
Google’s motives behind this move are pretty clear; the digital payments industry in India is rapidly becoming an extremely lucrative proposition. Due to demonetization at the back end of 2016, the industry grew 55% in 2016-2017. According to BCG, the forecasts are even more positive. The report estimates that the industry will be worth $500 billion by 2020, accounting for nearly 15% of the country’s entire GDP! Growth will be sustained by a shift in consumer habits and enhanced infrastructure. 80% of India’s urban population is expected to adopt digital payments by 2022. Infrastructure for digital payments at physical locations is also improving, with an estimated 5 million point of sale (PoS) machines by December 2017. As a consequence of infrastructure growth, 70% of retail chains are expected to adopt digital payments by 2022.
Of course, Google already has plenty of competition to contend with already. Paytm is currently the clear market leader, with other players like MobiKwik, PhonePe and Hike are also gathering steam. Google will also have to face tough competition from rumoured upcoming digital payment services from giants like Amazon and WhatsApp. So how is Google planning to differentiate its own offering from the rest of the pack? Firstly, Tez will include support for UPI, something which only a handful like PhonePe and Hike offer at the moment. Also, Tez will reportedly allow for some amount of interoperability with support for PayTM and MobiKwik as well.
Despite the competition, Google is uniquely situated to conquer the market. Android is the overwhelmingly dominant operating system in India, something that could sway the momentum in Google’s favour. Google also enjoys the luxury of a pre-existing user base of mammoth proportions, which could easily transition into the user-base of their digital payment service as well. Now, with Google officially throwing their hat into the ring, PayTM and other incumbents have strong reason to be worried.