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Google says it is trying to help India to become a cashless society, by mimicking the ubiquity of notes and coins in the country through a new all singing, all dancing app called Tez. Tez is a Hindi word, meaning “fast”.
The company hopes that, by providing multiple use-cases through its new service, customers will seamlessly adopt it without missing the versatility of hard currencies.
Google are keen to stress how Tez can become a central hub for family finances, businesses, and person-to-person money transfers; in its launch statement the company says:
“Send money home to your family, split a dinner bill with friends, or pay the neighbourhood chaiwala. Make all payments big or small, directly from your bank account with Tez, Google’s new digital payment app for India.”
They have also produced a promotional video.
Tez – New Technology is everywhere!
Besides its multiple use cases, Google is also introducing some interesting new technologies, such as its own proprietary technology audio QR, which gives smartphones the ability to “talk” to each other using ultrasonic sounds.
Audio QR will be used initially for money transfers, negating the need for NFC technology, which is not present on many of the lower-end smartphones used by India’s population. Nearly all smartphones can handle audio QR.
The app, available on iOS and Android operating systems, has another advantage over rival payment and mobile wallet style services which helps it cope with India’s highly fragmented market; the app can support languages including English, Hindi, Bengali, Gujarati, Kannada, Marathi, Tamil and Telugu.
Tez also has the capability to link with many of India’s major banks via a system called Unified Payments Interface (UPI), a monetary system and payment standard backed by the Indian government. Partner banks include Axis, HDFC Bank, ICICI, and the State Bank of India. Most major Indian banks, however, are yet to sign up for UPI.
The Indian government have long been trying to persuade the population to embrace cashless payments, as they believe it will help fight corruption, help Indian’s build up credit histories which will allow them to apply for more sophisticated financial services such as loans and mortgages, and make taxation an easier process.
It’s rumoured that a number of new smartphones coming to the Indian market, made by the likes of Nokia, MicroMax and Panasonic, will come with the Tez app pre-loaded, a strategy that landed Google in hot water with the authorities in Europe, who called the practice anti-competitive.
No fees for payments – yet – but opportunities for businesses
Google says that they will not charge any fees to either merchants or customers for payments made using the UPI system; this was confirmed by a spokesperson speaking with Tech Crunch, but it’s also suggested that Google may begin to charge fees once it starts to allow customers to upload their cards to the Tez wallet.
The wallet element is not, strictly speaking a mobile wallet, rather a service similar to Apple Pay, which allows you to make payments using a phone as opposed to a card or cash. The advantage of this is that rather than being uploaded to a mobile wallet, customers’ cash can stay in their accounts, earning interest, until they make an actual payment.
Google have already partnered with major commercial partners including Domino’s Pizza, RedBus transport, and Jet Airways. Tez will also run its own scratch card competition; users can opt in and win a prize every time they make a new purchase.
On the business side of things, Google offer a portal for online companies to integrate as sellers with a backend that enables merchants to offer a range of services such as subscriptions, loyalty programs etc. Businesses will also be able to send smart reminders for recurring or overdue payments.
P2P cash transfers
In terms of Person-to-person cash transfers, Tez allows users to switch into “cash mode”, which enables the audio QR to enable proximity payments – without any requirement for inputting bank details or even a phone number.
Transactions are secured by a system called the “Tez Shield”, which detects fraud, prevents hacking and provides identity verification services.
It’s also possible to transfer money using a recipients UPI address, provided they have a UPI-supported bank account. With India’s payments industry estimated to grow to $500 billion by 2020, Google may be coming late to the party, but they will be hoping to clean up.
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Google is calling Tez “just one step in a long and important journey towards enabling a cashless India”, and it’s clear they have high hopes for the service. The company has struggled in the past to monetise in India or gain a significant footprint when it comes to cashless transactions. Perhaps this will be the turning point.
Competition in the space is fierce, however. For example PayTM, a mobile wallet backed by Japan’s Softbank and China’s Alibaba, two of the world’s most powerful fintech players, has already racked up 200m users in the country. There are rumours that Facebook, via WhatsApp, will soon be entering the market.
Watch this space – America’s tech giants have had a relatively rough ride over the past year, being hounded in Europe and losing out in Asia – they will not want to be left behind in India, too.