Google enters India's mobile payments arena

'Tez' is compatible with government-backed Unified Payments Interface

Vice President of Google for South East Asia and India, Rajan Anandan, speaks during the launch of the Google 'Tez' mobile app for digital payments in New Delhi on September 18, 2017. / AFP PHOTO / SAJJAD HUSSAIN

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 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. While Tez is aimed squarely at India for now, the app may prove suitable for other countries in future, Google vice president Caesar Sengupta told reporters Monday.

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.


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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 $50bn 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 and Foxconn Technology.

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 country has emerged as a key focus for the company, which expects internet users there to reach 650 million by 2020, from around 400m now. Google recently resurrected its Android One showcase-phone program, a pet project of chief executive and Indian native Sundar Pichai's.

The Tez app supports several languages including Hindi, Bengali, Gujarati, Kannada, Marathi, Tamil, and Telugu.