MUMBAI (NewsRise) -- Alphabet Inc.'s Google has launched an India-specific mobile payments service called Tez, as the technology giant seeks to tap into the swelling base of internet users in one of the fastest-growing smartphone markets in the world.
Google joins Facebook's WhatsApp messaging service and Amazon.com in the race to enter the digital payments business in India that is set to grow at an exponential pace. According to a Boston Consultancy Group report, India's digital payments industry will be worth about $500 billion by 2020.
High-speed internet services started catching up in India amid the proliferation of smartphones. Last year, billionaire Mukesh Ambani's wireless venture rolled out fourth-generation internet services virtually free for initial subscribers, stirring a price war among telecom operators.
"Tez was built for India first - and starts us on a journey to make digital payments simpler and more accessible to everyone," Caesar Sengupta, vice president of the Next Billion Users initiative at Google, said in a statement on Monday.
Tez, which means fast in Hindi, works on the government's Unified Payment Interface, an instant online payment system, allowing users to make quick money transfers between accounts, Google said. It works with 55 banks, including the State Bank of India and ICICI Bank, and is compatible with Android operating system and Apple's iOS.
Rajan Anandan, a vice president for Google in India, said he expects 650 million Indians to be online in the next two years. "India is going through incredible transformation through the internet,"Anandan said.
Digital payments in India surged after Prime Minister Narendra Modi last year recalled high-value notes of 500 rupees and 1,000 rupees that accounted for 86% of the currency in circulation. The government, which pulled the notes from circulation in a bid to flush out unaccounted money, exhorted Indians to go cashless to improve transparency.
India has the world's most affordable data connection, with 70 million people shopping online. The number is expected to reach 150 million by 2020, Anandan said.
Google's foray into India's digital payments ecosystem comes at a time when the industry is dominated by mobile wallet services offered by market leader Paytm, backed by China's Alibaba Group Holding. Paytm accounts for more than half of India's mobile wallets user base.
In April, WhatsApp placed an advertisement on its website seeking a digital transactions lead for India, which accounts for a fifth of its more than a billion users. It sought a candidate who is familiar with the working of the UPI as well as the national digital identity database Aadhaar and BHIM payments app that allows money transfer and payments using mobile phones.
Earlier this year, Amazon.com said it won a license from India's central bank to launch a digital wallet.
Over the past few years, Google has been making steady inroads in India, launching a host of services designed to get more people to use its services and see advertisements. Last year, it launched Google Stations that allow users to access free Wi-Fi in designated areas and YouTube Go, an app that allows users to save videos for offline viewing.
To be sure, some experts say Google's latest move is an attempt to sift information on its users that underpins the technology giant's thriving advertising business.
"Google's information about an individual's preferences can play a good role in enabling businesses to know their preferences and provide offers with interesting options," said D.D Mishra, a research director at Gartner.
Google's Sengupta said the new app is not linked to its ads business.
"Data will be collected, but users will have the liberty to erase it any time. This data will be used to make the product better."
--Dhanya Ann Thoppil