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Google launched TEZ for mobile payments

Source: WSJ

Read Time: 2 minutes

Google is aiming for a piece of India’s booming—but increasingly crowded—mobile-payments business.

The Mountain View, Calif., tech giant launched its first-ever smartphone app that lets users transfer money to individuals and businesses in the country without the use of a credit or a debit card, a crucial factor since many here lack plastic.

Millions of Indian consumers have been ditching bills in favor of mobile-payments apps after Prime Minister Narendra Modi’s government made its surprise move last year to take 86% of currency out of circulation in an effort to curb corruption and bring more people into the tax net. The move triggered a cash crunch.

“India will leapfrog markets like the U.S. and Europe” in terms of adoption of mobile payments, Caesar Sengupta, a Google vice president, told the media in New Delhi. Services such as Apple Inc.’s Apple Pay and Samsung Electronics Co.’s Samsung Pay are increasingly popular in some developed countries. But they face competition from widely used credit cards and haven’t really taken hold in emerging markets.

Google’s app, called Tez, lets Android and Apple users send money from their bank accounts or receive it via a simple interface that resembles a chat app and works in seven Indian languages.

The app’s launch is Google’s latest move to customize products for India’s nascent internet economy, which analysts say it wants to tap to ramp up advertising revenue globally. The firm has joined with the Indian government to provide free Wi-Fi at railway stations and has released special apps for the market, such as a version of YouTube that works even with patchy internet connections.

“Google is late on this thing but they can easily scale it up,” said Tarun Pathak, an analyst at research firm Counterpoint. Some 96% of smartphone users in India are on Google’s Android mobile-operating system, he said, and the service could grow quickly if users flock to it.

While Google says it isn’t charging users or merchants for the service, Mr. Pathak said Google could one day use it to collect data for advertising purposes. Google declined to say if it has plans to bring the app to additional emerging countries, like Indonesia and Brazil, but said it holds promise for such markets.

Google’s new app faces some serious rivals. India’s market leader, Paytm, boasts more than 225 million users and in May raised $1.4 billion from Japan’s SoftBank Group Corp. , which it is using to fuel its expansion.

India’s biggest local messaging app, Hike, in June launched a mobile-payments feature, while Facebook Inc.’s WhatsApp—which has some 200 million users in India—is exploring adding digital payments in India.

India will leapfrog markets like the U.S. and Europe.

—Caesar Sengupta, a Google vice president

“We see our primary competitor as cash,” said Google Vice President Diana Layfield, stressing that the company views mobile payments as being in their infancy in India.

Mr. Sengupta said Tez, which means “fast” in Hindi, has already attracted about 50,000 users in recent days ahead of its official launch.

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