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How Google’s Tez Will Facilitate Digital Payments in India

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Mar. 13 2018, Published 10:39 a.m. ET

Google’s Tez payments service

Alphabet’s (GOOGL) Google has been trying to get into the digital payments service industry in India (INDA) through its UPI-based Tez app (application). Recently, Google updated its Tez payments service, which was launched in September 2017, to allow users to pay their water, Internet, electricity, and other utilities without any transaction charges.

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Rising need for mobile payments service in India

As fewer people use credit cards or NFC (near-field communication)–supported smartphones, the need for making payments through mobile devices makes sense in India. Google’s Tez app initially allowed payments between bank accounts using India’s UPI (Unified Payments Interface) protocol. However, both iOS and Android users can now pay utility bills to more than 80 organizations. The app is also linked to nearly 70 banks to streamline customers’ payment experiences. The app also allows users to get a list of previous bills paid and sends a reminder to pay upcoming bills. It also notifies the user when the payment is due.

Google’s bill payment feature seems to be coming at the right time, when rival WhatsApp, the Facebook (FB)–owned messaging app, has begun testing peer-to-peer payments in India. WhatsApp is used by more than 200 million people in India and could significantly capture the digital payments market in the country due to its strong customer base. Other mobile payment services widely used in India include Paytm and MobiKwik.

Google competes with rival payment services

In the United States, Google has recently rolled out a single payment service called Google Pay, which will combine Google Wallet and Android Pay. Google Pay will automatically make payments either from Google Wallet or Android Pay. The Google Pay payment system faces competition from Apple Pay by Apple (AAPL) and PayPal (PYPL) in the mobile payment service market.

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