Airpay Payment Gateway: Google, India's New "Dark Horse" in Payments

In today's India, Google Pay is doing exceptionally well, becoming one of the fastest growing apps in Google's history.

// This article contains 3,190 words and the estimated reading time is 11 minutes //

Who is the leader in India's mobile payments space? It's neither Alibaba, the forerunner from China, nor Tencent, Apple, Visa or PayPal. while local firm Paytm continues to lead, Google has emerged as a dark horse.

For years, in addition to its advertising business, Google's parent company, Alphabet Inc. has been trying to diversify its revenue by venturing into new areas such as cloud computing and hardware. While its profits continue to grow, it needs to find new sources of revenue as regulation tightens at home and abroad. GooglePay, which is thriving in the world's largest untapped digital market, could be just the expansion engine it's been looking for.

In current India, Google Pay is one of the fastest growing apps in Google's history. Even though it was launched only two years ago, millions of consumers have already used it to make purchases and transfer money, with transactions reaching tens of billions of dollars.

Google Pay, which is similar to a messaging app and offers local language services, became the world's most downloaded fintech app last year, app research and marketing firm Sensor Tower said.

Indian consumers use it to buy train tickets, pay bills and even buy lunch from street vendors. Small home shops across India now display a logo with a capital "G" and the blue, red, yellow and green colours of Google, signalling that payments can be made through the app and are completely free.

Satish Meena, New Delhi-based analyst at Forrester Research, said, "Google's optimism about India is well-founded. They have a lot of traction. The opportunities in India are huge."

Since its launch in September 2017, Google Pay has been downloaded more than 180 million times. In the first half of this year, it surpassed PayPal or its subsidiary Venmo, PayPal's micropayment software, in global downloads.Sensor Tower's data also shows that it surpassed Alipay, which is owned by Alibaba's Ant Gold.

Speaking at a New Delhi event, Caesar Sengupta, Google's vice president for the Next Billion Users project and payments business, said, "India is setting the standard for digital payments globally." He added that the service processed more than $110 billion in transactions in the past year through the government-developed Instant Payments system.

"Blitzkrieg for a head start.

Analysts estimate that Google Pay's current usage equals or even exceeds that of any other service, including the Tencent-backed app, as well as Paytm.It is worth noting that Warren Buffett's Berkshire Hathaway, SoftBank Group and Alibaba are all investors in Paytm.

Globally, Google offers a third-party payment system called Google Pay, but in India, Google Pay is the only service that doesn't require a credit or debit card to make real-time payments, for both personal and business users.

Shopkeepers in India can display printed QR codes for customers to scan. If it's between two individuals, they can open the app, place their phones together, connect using audio pairing and make a payment.

Thanks to cheap mobile data and smartphones, hundreds of millions of Indians are stepping into the digital economy for the first time. While cash still dominates, most Indian bank account holders skip credit cards and go straight to their mobile phones for simple payments.

In 2016, the Indian government removed the largest denomination of currency in circulation to curb corruption, a move that led to consumers having to stand in long queues at ATMs. Many people downloaded mobile wallets like Paytm to learn about digital payments and grew accustomed to using them.

Google was quick to recognise the opportunity. It has used its vast funds to "enter the fray" by attracting users through flash ad campaigns and cash rewards, aiming to gain a foothold in the digital payments space in India, which has a population of 1.3 billion.

Morgan Stanley's 2018 report shows that the value of mobile payments in India is far behind China but ahead of the US. By 2023, the value of mobile payments in India could double to $450 billion a year. If Google launches adverts or other new services, it could capture market space worth $4.5 billion a year.

Google has got a head start, but challenges remain. The biggest threat comes from Facebook-owned WhatsApp, which has more than 400 million users in India, more than any other country, and launched a beta version of its payment service in February 2018 to 1 million users.

Two months later, the Reserve Bank of India said that payment-related data must be stored in India, which prevented the full launch of WhatsApp's payment service.WhatsApp has said it will comply with these regulations and hopes to roll out the service to all Indian users in the coming months.

Analysts said Google's launch of Google Pay was not affected as it was fully rolled out before the regulatory rules were released.

Surender Singh, a salesman at a smartphone shop in New Delhi, said, "A year ago, no one knew about this app."

He noted that Google Pay is growing much faster than other companies, even though users are also using other competing apps, and that nine to 10 people in his shop use Google Pay every day to buy items like chargers and headphones for up to $40 per transfer.

Singh said, "If people don't have credit cards or cash, they'll use Google Pay."

Job hunting and shopping on Google Pay

"India is changing faster than we've seen in any other market ...... The change over the last five years has been phenomenal," said Caesar Sengupta, Google's vice president for the Next Billion Users programme and payments.

This made one thing very important: Google executives needed to get out of their offices and into towns and villages to understand the needs of their users. Based on these findings, the company launched a payments platform for businesses and users, provided jobs for blue-collar workers, and set up a research lab focused on using AI to solve local problems.

India is seeing a huge number of new internet users joining every day, fuelling Google's innovation in the country. According to Kantar IMRB's 2019 report, India added 85 million new internet users between 2017 and 2018, taking the total number to 481 million. The total number of internet users in India is expected to reach 627 million by the end of 2019.

Given that Google and other US tech companies have pulled out of the Chinese market, it can be argued that India is the only country left with a big opportunity. Earlier this year, Google CEO Sundar Pichai said that the size of India's market allowed the tech giant to develop products here and then take them global.

But that wasn't the case five years ago.Sengupta says, "We did some India-first things. But more work was done to apply our best available technology to make a bigger impact in India."

Google Maps and YouTube are available offline in India. android, Google search and YouTube are also available here in lighter versions. "Now we are developing products for India. google pay started in India and is now leading the global payments space."

Google Pay has 67 million active users and more than $100 billion in annual transactions. Two thirds of these transactions occur in Tier 2 and Tier 3 cities.

To further grow its payments business, Google wants to continue to tap into the potential of businesses. To that end, Google has launched a new app for merchants called Google Pay for Business, which allows small and medium-sized businesses to accept payments via UPI and enables a seamless remote login and verification process, which takes place over a video call.

After downloading the app, the merchant presses a button, connects to one of Google's agents via video, and then registers the app.

Sengupta says, "Agents are now doing everything in their shops via video. We use image recognition and other information to ensure there is no fraud."

Another market opportunity is to get 800 million debit card and 50 million credit card holders to use Google Pay. with encrypted authentication, users can make payments, with the amount charged to their bank cards, which have to be registered and tied to Google Pay.

Sengupta said, "A short-term token will be shared and tied to your device, providing two-factor authentication." Currently, it is only available for Visa cards. The verification skips the process of entering a one-time password and allows payments across multiple screens. He promises that RuPay cards and Mastercard will go live soon.

The tech giant has also launched the Spot platform, which allows online merchants to integrate their entire shop with Google Pay. Users can scan a merchant's Spot code (a unique QR code style image) to open an online shop within Google Pay. "You don't need to download anything [the app]. It's instant, super fast, no download and no installation," Sengupta explained. Eventually, it will be available to offline merchants as well.

Additionally, Google is using its Spot platform to match blue-collar workers with entry-level job opportunities.Sengupta said, "If you're a retail assistant, or a logistics delivery person, or even a liquor industry worker, finding a suitable job can be very difficult." Through its new platform, Kormo, Google can help these people find jobs through the payments app, which is integrated into Google Pay. The company already has partnerships with 24 employers including Swiggy, Dunzo and FabHotels.

Apart from helping people find jobs, Google will also set up a Google Research Centre in Bengaluru, led by senior AI researcher Manish Gupta, to look for AI solutions in areas such as healthcare and education.

The company is also developing female-centric products. "We have done a lot of research to understand what makes women feel more comfortable using our products in India, a country where there is a large gender gap in internet usage."

For example, many Indian women don't want to upload their photographs as profile pictures as it may threaten their security.Google Pay's audio QR feature can help women who don't want to give their names or share their phone numbers.

(This article was translated by The Passage, click "read original" to view the original text)

- End -

Past Featured Articles:

- Foxconn women workers in India

- Selling Jiang Xiaobaijiu to five-star hotels in India

- Three years later, a new India was discovered.

- Report: More than 60 million internet users in India this year, two-thirds are young people

- A major loss for Samsung in China?

- Progressive India: The Passage and Dakan Capital's India Study Tour Full Transcript

- Not a chance in hell.

Now, The Passage (The Passage) is hiring interns in Bangalore, India.

Click to learn more!

Read the original article