Brief:

• Google is making its first major entry into Asia mobile payment markets with the introduction of Tez, a free mobile wallet in India that lets people link to their bank accounts to make payments securely at retailers and online. It handles person-to-person money transfers using Audio QR technology that doesn’t need near-field communication (NFC), TechCrunch reported.
• Tez is now available for iOS and Android devices and can be linked to major banks like Axis, HDFC Bank, ICICI, the State Bank of India and others that support the United Payments Interface (UPI). Phones from Lava, Micromax, Nokia and Panasonic will soon have Tez preloaded, Google said.
• Large food chains like Dominos and transport services such as RedBus and Jet Airways support the Tez app, which supports languages including English, Hindi, Bengali, Gujarati, Kannada, Marathi, Tamil and Telugu.

Insight:

While China’s mobile payment systems are being rapidly developed by companies like tech giants Alibaba and Tencent, India is more open to the introduction of cashless payments and person-to-person transactions. Meanwhile, in the U.S., Google, Apple and others continue to face a slower-than-expected adoption rate for mobile payments.

Google’s use of AQR technology that uses ultrasonic sounds to transfer information between devices promises to make contactless transactions more flexible and seamless than with other payment systems like Venmo. NFC and Bluetooth tech aren’t as widespread in India, where low-cost, no-frills smartphones are more prominent than in other countries, per TechCrunch. AQR uses some of the most basic features found on all phones: a speaker and a microphone.

Mobile payment systems may be one way for the country to strengthen its cash ban. India this year banned the use of high-value paper notes as a way to tackle corruption and rampant bribery that permeates the country’s bureaucracies. India’s shadow economy is estimated to make up a fourth of its $2 trillion gross domestic product, according to estimates from McKinsey & Co. The cash ban has meant bribes now include gifts of land, houses, luxury watches and expensive travel abroad, Bloomberg News reported.

Although Google isn’t yet collecting fees from card transactions made on Tez, TechCrunch reported that the company may later shift its monetization strategy. The broader population in India is generally comfortable with mobile tech, as a report by Internet and Mobile Association of India and market research firm IMRB International found that 77% of urban users and 92% of rural users consider mobile as the primary device for accessing internet. There is clearly room to grow in this market, and Google appears to want to position itself as the leader in the mobile tech and payment space in India. According to a report from BCG and Google, digital payments in India are expected to hit $500 billion annually by 2020.