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Google plans major revamp of payments app GPay to expand its e-commerce play

By Priyanka Pani

June 12, 2020

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Internet giant Google is trying to replicate its India success story back in its country of origin. The Moutain View-based company that launched its payments business, Google Pay (GPay), in India in January 2018, has witnessed a massive success and wants to replicate the same in the US. According to a report in The Information, the search engine is already looking to expand the app into a broader e-commerce portal. Google is talking to several small and large businesses, both online and offline, to set up shops in the payment app itself and make it a default shopping portal.

According to experts, Google wants to be a one-stop shopping destination for Americans and allow them to pay through the app itself just the same way it does in India. Currently, it acts as a payment wallet in that country.  For Google, India is at present the biggest market for payments and dominates the digital payments market with over 60%  market share in transactions carried out on the UPI.

The move also comes in at a time when it is looking at competing with players such as Amazon in e-commerce and players such as Facebook and Apple in terms of digital payments. The reports also come in at a time of the COVID-triggered pandemic that has left for broader adoption of contactless and digital payments.

Early this year, Sundar Pichai, CEO of Alphabet Inc., Google’s parent company, had hinted at a revamp of its payments product, Google Pay, before making a global launch this year. Responding to questions during the Q4 earnings call, Pichai had said that the company has witnessed a lot of traction with its payments product over the past 18 months and that it is time to launch the product globally.

“We’ve had a lot of traction with our payments product over the past 18 months. We had a tremendously successful launch in India from which we learned a lot of features, and we are bringing that, and we are revamping our payments products global. And so I’m excited by that rollout, which is coming up in 2020. I think that will make the experience better,” Pichai said.

With the payments product, Pichai was referring to Google Pay, a digital wallet platform and online payment system, launched as a pilot for the Indian market in January 2018 as ‘Tez’ (meaning speeding in Hindi).

Google Pay entered the Indian market by integrating with the Government-backed Unified Payment Interface (UPI) to enable peer-to-peer and online payment services for Indian users. In just two years, Google Pay has garnered the most massive pie in the transactions occurring via UPI. Google Pay, as per the latest report by Indian FinTech Razorpay, is at over 60 %, followed by PhonePe (26%) and Softbank-backed Paytm (7%).

“… people do come with an intent to discover, learn, and commercially engage as well, and when they are looking to transact, payments end up playing a critical role. So the less friction you have, it tends to work better. So, we’ve been focused on doing that and getting more of our users set up in the right state,” Pichai added that the company has taken cues from the Indian market and would soon launch a global payments product in 2020. He, however, did not give any exact timeline for the same.

Google Pay hit 67 million monthly active users (MAUs) in India in September last year, facilitating transactions worth over $100 billion, according to industry reports.

In India, Google has also launched a new app called GPay for Business — a free and easy way for small and medium-sized merchants to enable digital payments without the hassle of time-consuming onboarding and verification process.

Meanwhile, the company has been battling a legal case in India around the Google India Digital Service in UPI, unified payments interface.

According to a petition filed, Google India’s app ‘Google Pay’ was flouting the rules of Unified Payments Interface (UPI) interoperability and that it does not allow new users to use their existing Virtual Payment Address (VPAs) or UPI ID on its platform, which the consumer might have created through other UPI platforms or apps.

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