Image via Google
Google has launched its first major payments service outside the United States, confirming rumors of a mobile wallet for India called Tez. The service is jumping in with several large international competitors, including WhatsApp, Uber, and Truecaller, who are all seeking to capitalize on India’s big push towards a cashless society with the recent launch of a payments system called UPI.
Tez goes beyond Android Pay to support “cash-like” payments to shops or between people, using India’s government-backed Unified Payments Interface (UPI), a protocol introduced last year that lets apps link to 55 of the country’s major banks; its regulators expect it to facilitate 400 million transactions between 2017 and 2018.
With Google’s Tez, users in India will be able to send money to their friends or pay local businesses, everything from the “chaiwala nearby, your milk delivery service or even your favourite salon,” according to Tez’s description on the App Store. Tez, says Google, is “made for India First.”
Google never got round to introducing its main payments offering, Android Pay, in India. Perhaps that’s just as well. Android Pay, available in more than a dozen other countries, only works with Android devices that are NFC-enabled and run on Android KitKat 4.4 and above.
Tez has the potential to reach many more of India’s 300 million smartphone users by working on iPhones too, helping Google get around Android’s notorious fragmentation problem, as well as some of the security concerns that have hampered Android Pay’s adoption.
But Tez already faces competition from a raft of established services in India. Flipkart, the local e-commerce giant, has a payments app called PhonePe based on UPI, while Indian messaging app Hike, which claims to have 100 million registered users, launched a UPI-based wallet in July. WhatsApp, which has more than 200 million active users in India (meaning it’s on two out of three smartphones in the country), is reportedly preparing to launch its own payments service based on the UPI standard later this year.
Like Android Pay, Tez won’t charge any fees to send money to another user. Even merchants in India will be able to use it for free. Google may instead see Tez as a long-term play, potentially using the data it can glean from transactions to better deduce local spending habits, and use those insights for targeted marketing.
Google’s Caesar Sengupta, vice president of Google’s Next Billion team, told BuzzFeed that transactions on Tez weren’t entirely private. The company would be able to see “who paid whom and how much, which is ‘not different from any other UPI-based payments app.’”
Google has struggled to attract people to Android Pay since it launched the service in September 2015. The service has two-thirds the users of Samsung Pay, and a quarter of the number of people using Apple Pay, according to a report by Juniper Research in April 2017. This despite the fact that Google was the first major technology company to market with a mobile payments service when it launched Google Wallet six years ago.
Chart via Juniper Research
Since then, Android Pay has superseded Google Wallet, which was never available outside the United States anyway. Launching a much more localized app like Tez, which Google touts as being “made for India” is Google’s next attempt at payments and this time around takes local circumstances into account.
“Indians love cash,” Google’s Sengupta wrote in a blog post Monday. “To make digital payments truly work for India, we wanted to build a product that can compete with cash.”
Google may be planning to tailor Tez to slightly broader tastes, too. Recent trademark filings by Google for the name “Tez” suggest it’s planning to introduce the service in Indonesia and the Philippines.