Google Pay in India adds strategic features to keep competition away

The online payment platform seeks to consolidate its top position in the Indian payments market.

Photo by Matthew Kwong on Unsplash

In the fierce and crowded Indian digital payment space worth USD 65 billion, Google Pay on Thursday announced it’s spreading its arms to new verticals: Google Pay for Business, ‘Spot’ platform for job listings and card payments, and launch of an artificial intelligence (AI) lab in Bengaluru.

This announcement, which people in the industry claim can be game changing for the California-based internet giant’s prospects in India, was made on the side-lines of its 5th ‘Google for India’ annual flagship event in New Delhi.

A standalone app, Google Pay for Business will allow merchants to list products, accept payments and customize experiences they want for their users.

Google, which already runs a jobs platform in Bangladesh and Indonesia, will also launch a job search tool inside its Indian payment app for users to discover entry-level and white-collar jobs. It has collaborated with Swiggy, Dunzo, 24Seven, Fabhotels and HealthKart to help them post jobs on the Google Pay platform.

The job classified service is part of the so-called ‘Spot’ platform open for merchants that allows them to create an in-built customized menu within its payment app. Google said, various merchants including UrbanClap, Goibibo, MakeMyTrip, RedBus, Eat.Fit and Oven Story are already using the platform.

The internet search-giant is also allowing users to make payment with their debit and credit cards via tokenization technology, which ensures users’ card numbers are not revealed to the merchant. This technology uses a digital token generated during the transaction for masking the card numbers and also eliminates the hassle of entering one-time-password.

Although, the motive of these features is to differentiate itself from its arch rivals Flipkart-owned PhonePe and Alibaba-backed Paytm, they are very similar to what its competitors already have in the market. Google Pay’s Spot platform is similar to PhonePe’s mini-app called ‘Switch’ that allows users to access 50 plus businesses, while Google Pay for Business mirrors WhatsApp Business and PhonePe for Business.

However, Google Pay has outdone PhonePe in terms of monthly active users: while Google has amassed 67 million MAUs, PhonePe has 55 million MAUs. The payments market in India is projected to be worth one trillion dollars by 2023, according to financial services advisory Credit Suisse.

According to the talks held at the event, even though 400 million users in India are online as of now, many businesses in India don’t use internet to increase their business. “India has more than 60 million small and medium-sized businesses, however only a fraction of them support digital payments. Imagine the transformation that is possible if more of these merchants could access payments online,” said Ambarish Kenghe, director and product manager for Google Pay.

In terms of value of transactions on the Unified Payments Interface (UPI) platform Google Pay leads by a margin of around 25%. Whereas in terms of transaction volumes on UPI, Paytm is at the top closely followed by PhonePe and Google Pay.

UPI is an instant real-time payment system developed by National Payments Corporation of India which instantly transfers funds between two bank accounts on a mobile platform. In the past two years, the UPI-based payments have witnessed a growth rate of over 5000% driven by cheap data tariffs and the ubiquity of android based smartphones in India.

Further, without revealing any timeline, Google said it’s going to launch Google Research India—a Bengaluru-based AI-lab to foster India’s AI community and contribute to the company’s global AI initiatives. “We look forward to engaging with everything from academic institutions, to government to the industry and startup ecosystem in the country in the field of AI,” said Jay Yagnik, vice president and engineering fellow, Google.