India's withdrawal of the 500- and 1,000-rupee bank notes led to nationwide strikes, protests in front of banks, and the closure of educational and commercial establishments.
However, it also resulted in a surge of digital transactions predicated on the creation of a bank account, of which less than 10 percent of the country had pre-demonetization. According to Google’s data, there are more than 300 million smartphone users in India, although NFC-enabled phones are scarce.
Tapping into its connected ecosystem and reach, Google has launched an app called Tez, representing its next step towards encouraging financial inclusion.
Hindi for “fast”, Tez is a successor to Android Pay and allows users to link payment apps from all of India’s 55 banks, enabling secure peer-to-peer payments, similar to EasyPaisa. It also relies on a data security platform called Tez Shield that protects the identity of its users while detecting fraudulent activities.
“It's going to take a miracle for Google to create its space or even dominate India's market because cash on delivery prevails and a number of local banks and telcos are already offering payment services, PayTM is such an example,” noted Ahmed Muzammil, the founder of Mezino.
He added that in the presence of PayPal and Amazon, penetration into the smart payments sector with little or no control of the e-commerce ecosystem puts Google in a difficult position.
“The only competitive advantage it may have over others is it's six-language support in addition to Hindi and penetration of Google services amongst millennial Indians,” he added. “If you ask me, I would not bet my money on Google Tez.”
The app is meant for ordinary citizens as well as SMEs, both of which made up the majority of unbanked citizens before the demonetization took effect. Listed SMEs and businesses will be able to own a presence on the app, with the ability to interact and transact directly with users. This eliminates the need for creating a branded app, which places undue load on a user device.
This opens up room for mobile-enabled loyalty programs as well as location-based marketing opportunities. Registered merchants will also be able to engage users directly with reminders on due payments as well as share customized offers.
Thus far, large local brands such as Domino’s Pizza, PVR Cinemas, and DishTV have signed on as launch partners and early adopters.
Currently available for iOS and Android devices, the Tez app is currently limited to users in India, requiring an Indian carrier mobile number upon sign in. In the coming months, Google will roll out the app in emerging markets such as Vietnam, Thailand, and Indonesia.
“Some of its features really stand out, like Cash Mode payment that can be used to pay nearby Tez users via Audio QR technology,” said Sibtain Jiwani, founder of SmartChoice. “Launching initially in India is a smart move as their government has taken various initiatives to move towards digital payments.”