Google adopts Tap to Pay to facilitate payment in India

Google has just developed a new Google Pay feature, in partnership with Indian terminal operator Pine Labs in India. The latter will allow users to pay directly with their Android mobile, via the Tap to Pay system powered by the Unified Payment Interface (UPI). A simplified alternative to consolidate the web giant's dominant position in local payment systems.

FACTS

• UPI is India's payment system for making instant transfers between bank accounts. It allows its users to pay for purchases at the point of sale and transfer money to their contacts (account-to-account transfers).

• Well, the new Google Pay service will now build on this system to make in-store transactions even faster and more convenient.

• For this, the web giant has signed a partnership with local payment terminal specialist Pine Labs. The latter allows Google Pay users to pay by simply approaching their Android smartphone to a Pine Labs compatible terminal.

• There is no need to scan a QR code, only to enter the UPI PIN code.

• The feature will only work on NFC-enabled Android smartphones, and only on Pine Labs terminals installed at pilot merchants (including Starbucks) before a planned rollout later.

CHALLENGES

• Strengthening its dominant position: Google announced the launch of its payment service in India in 2017. Even then, the service was presented as UPI compliant.

• Continuing to diversify: Google Pay has allowed its users to personalise their experience since last year by accepting that their transaction history be analysed. Google Pay also allows users to open a deposit account since September 2021. We remember that last October, Google announced the abandonment of its Google Plex current account project. Today, the service is returning to its foundations, those of payment, but is still optimising its functionalities in order to establish itself even more as an indispensable and practical everyday financial tool.

• Responding to Apple: Apple, Google's main international competitor, made its Tap to Pay service official last February. But rather than instant payment, this eponymous service allows iPhones to be transformed into payment terminals. Google is ignoring this American announcement to impose its vision of a Tap to Pay service in India.

MARKET PERSPECTIVE

• Google is now headed by Indo-American engineer Sundar Pichai. The company has been investing heavily in India for several years, and still considers the Indian market as a future market.

• Since then, Google has established itself as a truly dominant company in India, even prompting the Indian competition authority to publish a report highlighting its abuses of competition. An investigation unit of the Indian Competition Commission (CCI) stated last year that the subsidiary of the web giant Alphabet was preventing mobile phone manufacturers from using alternatives to the Android operating system.

• These accusations do not prevent Google from expanding its ambitions in India today. The web giant signed a billion dollar investment agreement in India's second largest mobile phone operator Airtel last February.