Google Pay- A Digital Wallet Platform
“Today, banks think of each of their products- whether it is a debit card, credit card, loans, net banking, etc., as a separate product. The question is how do we ensure there is a seamless journey through all of this? That is where we come in.” Sumit Gwalani and Sujith Narayanan co-founders of Google Pay.
Google Pay is soon coming up with features for small merchants and business owners. This includes ‘Spot” which enables merchants to create branded commercial experiences that will bridge both offline and online worlds. There will be a dedicated enterprise app for small and medium businesses called Google Pay for Business, it will give additional benefits to them like payment tracking, billing cycle, and hustle free business variation process.[endnoteRef:1] [1: https://thetechportal.com/2020/02/27/google-pay-india-revenues-profits-financials-2019/ accessed on 29 march 2020
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Google Pay is a digital wallet platform and online payment system developed by Google. To power-in-app and tap-to-pay purchases on mobile devices, which enables users to make payments through their mobile phones, tablets, and smartwatches. Google Pay is the simplest way of sending money to your family and doing mobile recharge also, here sending and receiving money is done with zero fees and money comes straightly into the bank account. Google pay is providing scratch cards and other rewards also if the user uses Google Pay up to Rs 1,00,000. Google Pay is as easy as handling cash but with added security which helps in preventing fraud and hacking. It offers Fingerprint screen locks too.
On January 8, 2018, Google Pay and Google Wallet were unified into one single application named Google Pay. Google Pay was earlier Google Tez. It was released on Feb 21, 2018, in Android and later on in IOS on Feb 26, 2018. It is available in six languages- English, French, German, Italian, Portuguese, and Spanish.
• Services offered
Users can send money easily to each other. Users have to enter their email ID or the phone number of the recipient, the phone number must be linked to a bank account. If the recipient has google pay, funds will be directly transferred to that account. The users can link up to 2 bank accounts.
• Security-
Stores user’s data on a secure server. Full credit card and debit card information is never shown up so chances of fraud are very minimal and also there is no card limit. Users are required to have a PIN to protect access to their wallet account. In some cases, users have to verify their identity to make certain transactions. Fingerprint ID and Passcodes are used to activate Google Pay. Users can add payment cards by just taking a picture of the card or entering card details manually so it depends on per choice of the user.
• Benefits-
Master cards, American Express, and Visa cards support Google Pay. Makes it easier for the users to add the card to the app. Google Pay is used in stores but users can also use it for making in-app purchases. Google Pay lets users store their digital tickets or boarding pass on their phones. It provides many layers of security that protect users from fraud.[endnoteRef:4] [4: https://joyofandroid.com/google-pay-review/ accessed on 11 March 2020
Industry and Competitors
Fintech is a prominent industry that uses new technology to improve Financial Services. It helps businesses, consumers, and companies to manage their operations and process. Fintech is more consumer-oriented. From mobile banking and insurance to cryptocurrency and investment apps it has broad applications. It helps to transfer money, deposit cheques using smartphones, raise money for business startups, and many more things without the help of another person.
Traditional companies and Banks are constantly adopting Fintech services. In banking customers have increasingly demanded easy digital access to their bank accounts through their mobile phones, which now most of the banks are providing. Fintech is having a huge impact on banking. Some fintech trends of 2020 are the Rise of robo-advisor in stock trading, the use of blockchain in anti-money laundering, the implementation of credit, and the decentralization of global payments.
Its competitors-
Google Pay is having remarkable growth since it was launched in 2017 in India. It has done transactions worth Rs. 47,700 crores way more than Paytm and PhonePe. PhonePe was second with transactions worth Rs. 42,610 crores, users do transactions with the help of PhonePe wallet, pay bills, and many more, and then Paytm with 35,500 crores, helps users to make transactions using mobile wallet, credit/debit cards, and UPI. Paytm also added a new feature where users get cashback in gold which is safely stored by Paytm itself. GooglePay has about 2000 online merchants such as food tech, travel, movie or event tickets, and so on. It has also collaborations with Pine Labs to boost its offline transactions. Google Pay is currently handling 60% of transactions through payment gateway whereas PhonePe handles only 23% only Google Pay India’s revenue was up 92% in FY19, and profit grew by over 75%. PayPal helps to transfer money between friends easily and allows large transactions but it is expensive as it charges a 2.9% fee for money sent from a debit or credit card. And extra 30 cents on top of it. Apple Pay enables iPhone users to send and receive money very fast with a 3% fee when using a credit card but it can only be used by IOS devices, not Android.
Business model
Google Pay does not have any typical business model to bring revenue as Google does not make any money from Google Pay right now but if Google continues to grow its Google Pay user base, chances of earning revenue can be seen in the future. Google Pay is a strategy of Google to collect and gather more data. Google Pay helps to perform the business model of Google. Google will start to charge banks and in-store payments, also the collaboration with Citibank will lead to more financial services and an increase in revenues. In the future, the business model of Google Pay will change to become a complete revenue generation structure.
Financing
Google India Digital Service Private Limited has financed Google Pay with no intention of earning profits but they recently announced that they will be focusing on businesses to bring more growth for Google Pay. Google Pay has reported a revenue of $ 156 million for March 2019. It marks a shocking 155% increase over previous years. The company has reported $61 million in revenues for March 2018. Google has a growth of $710 in profits for the year ending on March 2019, which is a little lower as compared to the previous year's profit which was $760 for the year ending in March 2018. But if we look at the revenues side, profit is required to be improved.
Marketing
The price charged by them is absolutely free which means users can freely access Google Wallet, and sending and receiving money is also free. Users can get Google Pay in app stores as it is an online application. Google Pay promoted their app in many ways like the Google Pay Diwali offer in October 2019, where users have to collect 5 different stamps by transfer/pay/recharge and get the assured reward of Rs. 251 and also a lucky chance to win Rs. 1 lakh. In the month of December 2019, Google Pay introduced the Welcome 2020 offer in which users have to collect 7 different stamps to get a scratch card reward of Rs. 10- Rs. 101 on 1 layer of cake, Rs. 101- Rs. 1000 on 2 layers of cake, and Rs 202- Rs 2020 on 3 layers of cake before December 31, 2019. On 30 November 2019, Google Pay came up with a new strategy to give rewards to users for hearing advertisements too.
Innovation
Google Pay will be the only app that will enable merchants to accept online payments without dealing with an agent, merchants will now be able to support digital payments at their own convenience through remote video process within minutes. There will be a software platform called Spot that will allow businesses to create their own branded commercial fronts that will be easily accessible by customers through Google Pay. Eg- If a restaurant has built a storefront, users can now easily see the offerings in the app itself. The company has also developed Spot codes, which will allow the people in the store to scan and pick the items they wish to order and pay for them. A customer would now don’t have to wait in long queues.
A new feature will be added in the app which will enable users to discover entry-level and white-collar jobs. It will help them to search right jobs that require them and also prepare for entry-level positions. They are also coming up with tokenized cards for debit and credit card holders which will allow them to pay using digital tokens instead of actual card numbers. A loan feature is also added which allows Indian customers to access instant loans through the app
Issues related to firm
- Delay in support, need more quick resolution system
- There are transaction failures as Google Pay fails to make the successful connection on the first attempt
- No option to pay with credit cards.
- Chances of unlinking the bank account of already existing customers.
- has UPI limit in transactions, E.g.- ICICI has a limit of Rs 25,000 for Google Pay users but for its own app the limit is Rs 1,00,000.
- is not 100% safe and secure from any privacy concerns.
Challenges
Facebook plans to launch its Whatsapp payment services in India in 2020 as Whatsapp has a huge following in India, with more than 400 million users. This step could be a huge disruption to market leaders like Google Pay and Paytm.
Paytm is also coming up with a major challenge by investing 200 billion rupees in the next two years to hold back its rivals that are trying to take the lead.
OnePlus is going to launch the OnePlus app in 2020, what technology they will use and which bank they will support is still untold.
Google Pay recently removed the ‘check balance’ feature from Android not from iPhones due to increased load on UPI as PhonePe stopped working so many users migrated to Google Pay. Users won’t be able to check real-time bank balances, though there is no problem in sending and receiving money but still it can go against the company.
The road ahead for google pay,
Promote acceptance of digital payments with merchants than users as small merchants shy away from using POS systems. By monitoring of transaction failures, it will improve the success rate. Google Pay can monitor progress data like which area has the most usage and which doesn’t it can help to target users accordingly. Make B2B transactions more software friendly to track transactions and reports for monthly payments. Provide multiple profiles in a single app like login/biometric/passcode etc. Enable recurring payments like Paytm does for electricity bills in which users get alerts before due dates.
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