Money & Banking

Will Google’s Tez be a game-changer in the crowded payments space?

| Updated on: Jan 10, 2018


The app has features that give it an edge over the competition, say experts

The entry of Google into the crowded payment space is set to shake up the fintech segment. While Softbank-backed Paytm disrupted the Indian payments segment about seven years ago, Google could democratise digital payments with its already established customer base.

Over the last year or two several startups, banks, mobile manufacturers, online marketplaces and messaging apps have entered the ever-growing digital payments space targeting different sets of consumers with different kinds of solutions. Even the government launched initiatives such as UPI (unified payment interface) and BHIM.

However, the segment is set to witness another major shake-up with the entry of Internet giant Google. The company has launched an India-specific payment app called Tez (meaning fast in Hindi), which runs on UPI and allows customers to send/receive payments directly into users’ bank accounts.

BusinessLine spoke to several industry experts, fintech players and consumers to find out how Tez can have an edge over existing players such as Paytm (e-wallet), BHIM (UPI-based wallet), SBI Buddy (wallet), Amazon Pay and Samsung Pay.

Vikram Gupta, founder of venture capital firm IvyCap, said: “Google would definitely have an edge over others. It has enough data to address this particular market while others are still taking time to figure out.

“Besides, Google’s cost of execution is going to be significantly lower compared to some players who are still burning a lot of cash to acquire new consumers.”

DD Mishra, Research Director, Gartner, said the focus on vernacular languages can be a game-changer in this space as the government is trying to push digital payments under its vision of having 100 per cent financial inclusion by 2010.

Besides, it tries to address security concerns as well as it runs on UPI, he said, adding that UPI payments will have an upper-hand if they continue to remain free and provide better security, convenience and more value-added services.

Tez, designed as a Lite app, is just 7 MB in size so that it can run on slow Internet connections, a major challenge in smaller Indian towns and cities. Compared to this, Paytm is 77.4 MB, which can be an issue when running on patchy Internet connection.

In a bid to make more customers transact digitally, Tez has kept transactions free of any charge; wallets charge a commission on transactions. Bank also charge a commission on NEFT, RTGS and IMPS transactions and there are limits to the amount you can send at one time. However, on Tez there are no such limits.

Also, to make payments easy and secure, Tez allows one to send money without having to share personal and financial information. Called cash mode, the feature runs on a technology called Audio QR, for which Google has filed a patent. Other players do not have this feature.

Tez also allows payment through QR Code, which again most of the other players do have.

Tez got about four lakh active users in just 24 hours of launch.

Published on September 20, 2017
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