With 7.5 Mn Tez App Downloads, Google Is Eyeing To Lead India’s $500 Bn Digital Payment Industry By 2020

Riding high on cash back and reward offers, Google’s Tez, a UPI-based digital payment app has registered almost 7.5 Mn downloads in the 40 days since its launch, informed the company CEO Sundar Pichai while speaking at a quarterly investors’ meet. While the app could not break the Indian government-backed BHIM’s record i.e. 10 Mn downloads in 10 days of its launch, with 7.5 Mn downloads, Tez is quietly shifting the digital payment equation in India, posing some serious existential threat to Paytm, Flipkart’s PhonePe, and Axis Bank’s Freecharge.

While addressing the investors, Pichai reaffirmed his commitment to India and Asia markets. He stated, “We see a way to look at these markets with a lot more thought and address them for the opportunity that they have, not just apply our global products there. So I think that’s what led us to do Google Tez in India. And we’ll thoughtfully look at the opportunities in that region and invest a lot in the years ahead.”

Why Google Preferred To Launch Tez Not Android Pay?

Google has been present in the digital payment market since 2011. Initially, launched as Google Wallet, it got replaced by Android Pay in 2015, to counter Apple Pay success. While Google’s e-wallet Android Pay has been already launched in leading countries across the world, in India, Google came up with a customized solution Tez, postponing Android Pay launch in the country.

Android Pay is heavily dependent on Near Field Communication (NFC) facilities that the e-wallet use while transacting. In India, as most of the smartphones belong to the lower-midrange categories lacking NFC, it was impossible for Google to penetrate a larger market base through Android Pay. Also, Android Pay uses credit card links for the transaction. Which poses another hurdle as credit card use is very low in India, limited to 25 Mn users out of 1.3 Bn people residing in the country.

As the central government launched UPI payment platform, an interface currently backed by 50 banks, Google finally had a way to penetrate the 500 Bn (by 2020) Indian digital payment Industry.

Why Tez, when there is Paytm, PhonePe, BHIM, Freecharge and Amazon Pay?

Considering all the existing digital payment gateways, Tez scores over others in certain areas, giving Google a reason to keep its quiver loaded. Unlike, Paytm, Amazon Pay, or PhonePe wallets, Tez is not a wallet, but an app that lets one transfer his/her money through UPI. Unlike Paytm, Tez allows the bank-to-bank transfer directly. The app doesn’t need to be recharged first to make transactions, unlike all others which store the money first in their wallets. With Tez, one can also transfer money using one’s gmail account.

So, if Tez is directly competing with anyone, it has to be BHIM. Compared to BHIM, Tez has better interface design and with Google’s ecosystem, the app is aimed to score over BHIM too, in the long-run, despite the fact that BHIM is backed by the Indian government. Tez is also enabled with Audio QR/QR facilities in cash transfer mode that lets anyone transfer money as low as $0.77 (INR 50) to anyone near to a user’s location.

Besides the cash mode, users have also got the facility to transfer money using their bank accounts, UPI IDs, or by scanning a QR code, or merely phone numbers registered on the app. While launching the app, Caesar Sengupta, VP, Next Billion Users, Google said, “Tez has been made for India and will make payments as simple as cash.”

The Appointment Of Sundar Pichai, And His India-centric Approach

The world’s leading companies Apple and Google, be it in terms of brand value or market cap, did not include India as their key markets till late 2015. However, in 2014-2015, there were changes at several levels. Indian government came up with UPI, Bharat QR and a series of initiatives to bolster its Digital India campaign and invited all the companies including Google and Apple to co-operate, invest and enjoy the market space. Google’s owners Larry Page and Sergey Brin after having tried all the other options they had, appointed an IITKGP alumnus Sundar Pichai as the CEO of Google.

After market-giants like Yahoo, Nokia, BB and many other companies went down, Silicon Valley has been witnessing hot debates and discussions when it comes to selecting CEOs, i.e. whether a CEO should be from the content, services or marketing. Microsoft had earlier chosen marketing guy Steve Ballmer, as its boss, and met with drastic results. Later, techie Satya Nadella, appointed as Microsoft CEO in 2014, has not only brought the company’s mojo back, but his content-driven approach with Azure and stable MS 10 platforms has made Microsoft, an unbeatable B2B and B2C leader in its space. Google followed the Microsoft development closely, and zeroed with Sundar Pichai who was overlooking Google search, Gmail etc, its CEO on October 2, 2015.

When the bosses are Larry and Sergey, one is completely aware of what he/she is expected to do, however, very few at Google or now its parent company Alphabet have been able to achieve that. With Alphabet’s profit rose to $9.57 a share, Pichai seems to have cracked the formula. Be it having sessions with Shahrukh Khan or Deepika Padukone or attending small events in India, Pichai’s love for India is no secret, and shows in his design thinking too. In line with the government of India’s Make In India and Digital India, Google had decided to provide wifi at 500 railway stations across the country. After his meeting with the Prime Minister Modi, Pichai also announced to launch 10-language vernacular typing for Android users.

In his meeting with the investors on October 25, 2017, Sundar Pichai said, “I am really very excited about the potential that Tez brings to Indian market which is heavily dependent on the cash-based economy.”

1 Year Late, Does Tez Still Have A Chance?

Google has been competing with e-wallets and BHIM that were launched a year before Tez was launched. Also, considering that BHIM registered a record 10 Mn downloads owing to its brand ambassador PM Modi’s huge fan following as well as the cash crunch following demonetisation, what chances does Google Tez have to be the number one in the Indian digital payments space?

Among the pros are Google’s ecosystem, penetration and command over its users. It has been a leader when it comes to the software-use per capita. However, this didn’t help Google in making Google Plus a hit among its users. Facebook and Twitter remain the top choice of users in social media space. So, is Pichai aware of the customer’s behaviour, inertia towards new? Of course, he does.  Pichai has reportedly said, that it is about the differentiated opportunity in emerging markets and many of these markets characteristics are due to those being mobile first. In an interaction will Business Standard, he said, “It gives rise to different ways users are adopting our products. So I think we see a way to look at these markets with a lot more thought and address them for the opportunity that they have, not just apply our global products there.”

Whether Tez succeeds or not in the long run that is a matter of concern for Google; however, it certainly provides an alternate digital payment facility to Indian consumers, distinctly different from existing PhonePe, Amazon Pay, Freecharge or Paytm.