Google Tez is now Google Pay

Google is upping its game in the race for India's fast-growing digital payments market.

Background

Tez is a mobile payments service by Google, targeted at users in India. It operates atop the Unified Payments Interface, developed by the National Payments Corporation of India. It can be used where UPI payments are accepted. Tez works on the vast majority of India’s smartphones with the Android app and currently supports English, Hindi, Bengali, Gujarati, Kannada, Marathi, Tamil, and Telugu.

Analysis

The Mountain View-based company has partnered with four Indian banks to allow users to get loans via Google Pay, it announced on Tuesday.

Since its launch, users have made over 750 million transactions with each one settled instantly and securely into a bank account. In total, these transactions are worth over $30 billion annually.  It also has close to 1.2 million Indian local businesses on its platform. 

The US search giant is teaming with HDFC Bank Ltd., ICICI Bank, Kotak Mahindra Bank Ltd. and Federal Bank Ltd. to offer instant, pre-approved loans to customers “right within Google Pay in a matter of seconds,” it said in a statement.

From Facebook Inc.’s WhatsApp to Jack Ma’s Ant Financial, Internet giants are joining a race to provide financial services in the world’s fastest-growing mobile arena. Online lending is becoming the next frontier as mobile users look for small loans with minimal paperwork, served to them even without credit ratings as fintech companies use data and algorithms to determine risk.

Google on Tuesday announced that it has rebranded Google Tez to Google Pay. Stating the reason behind the rebranding, Caesar Sengupta, General Manager, Payments and Next Billion Users Initiative, in an official blog post said that the company plans to unify all of Google’s payment offerings globally.

“We have learnt that when we build for India, we build for the world, and we believe that many of the innovations and features we have pioneered with Tez will work globally. The world has certainly taken notice of India’s digital payments success and our deep investments here with Tez. Many governments are asking us to work with them to bring similar digital payments innovations to their countries. To make this happen, we will be unifying all of Google’s payment offerings globally. Starting today, Tez will now be called Google Pay.”

Customers of those banks who use the Google payment platform can get "pre-approved instant loans" and have the money deposited immediately in their accounts through the app.

The feature should be rolled out within the next few weeks, said Caesar Sengupta, the executive spearheading Google's push into emerging markets.

"We're working to expand financial inclusion through Google Pay by making the entire loans process simpler, quicker and more direct," Sengupta said at an event in New Delhi.

Google's Indian payments app, launched a little less than a year ago has around 22 million monthly active users.

"Over time we'll bring many of these features to Google Pay users in other countries, just as we'll bring features we've launched elsewhere to India," Sengupta said.

Google's push to grab more of India's digital payments market pits it against global rivals such as Facebook, which is testing a payments service in India on its messaging platform WhatsApp, and local rivals Paytm and Flipkart.

Market leader Paytm, which already counts heavyweights like China's Alibaba and Japan's Softbank among its investors, will soon get another high-profile backer.

Berkshire Hathaway, the company led by renowned investor Warren Buffett, is set to invest up to $360 million in the Indian payments platform.

Assessment

Our assessment is that India has turned into a battleground for the world’s biggest firms trying to stamp their dominance in the digital payments market. We believe that online lending is becoming the next frontier as mobile users look for small loans with minimal paperwork, served to them even without credit ratings as fintech companies use data and algorithms to determine risk. We also believe that the company is rebranding the app as Google Pay to bring it under Google's global digital payments umbrella.