Pay the Google Way – On Increasing e-Payments in India

Feb 17,2021 by Nishant Nath

Posted by Nishant Nath

Different types of Epayments in India and the growing craze

Despite the world facing a slew in economic growth, India’s economy has remained more or less resilient. One sector that has continued to grow in its usual rate was epayments in India. With applications like Paytm, PhonePe, YONO, and government’s very-own BHIM, the competition in Indian e-wallet market is tight. One application that has outrun its enemy and made its way through to the masses is Google Pay. For the smartphone-using mass in India nothing works like the payment app from Google.

It is only recently that Google has jumped in the payments business, while it continued to dominate the cloud hosting market. Google Pay initially lured customers in with its hefty cashback, which, though it continues to reward, are not as lucrative as they were once.

Google Pay Android Breaks All Records

Having occupied its share in the market, ‘Cashbacks are now more difficult to get’, said Nishant, who told us he uses Pay more than any other application. Google wisely used its ever-lasting chest of treasures to win customers.

‘Pay’ has more than 100 million downloads on Play Store alone. However, its initial years were not without troubles. Google Pay rolled out as Tez – possibly to give it is a desi tinge.

‘We had no idea ‘’Tez’’ was a google product until it officially changed its name to Google Pay’, said Sonu, who claims he has received cashbacks more than ₹2000 so far.

The Catalyst of E-Payments

The subcontinent did not simply wake and started transacting online. The government had long tried to encourage citizens to use epayments in India to avoid carrying cash and curb black-money, which both UPA and BJP had failed to keep check to. However the seeds for the craze that now exists for electronic wallets were laid not by the government, nor by the Google, but was an outcome of India’s biggest split ever, the Ambani’s.

While Mukesh got hold of Reliance Industries and IPCL, Reliance Infocomm, which was the most booming telecom industry then, went to the younger brother Anil. Even though the two now had almost equal shares of assets, the feud did not end – primarily because Mukesh had fostered and built the telecom, but unfortunately, it went to his younger brother.

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To further worsen things, there was a non-compete cause among Ambani’s, meaning neither brother could enter and compete against the other in any sector.

Ambani’s Put an End to The Non-Compete Pact

Relief came for the older brother when Reliance Industries successfully acquired 95% shares in Infotel Broadband Services Limited. The 4800 crore deal bought Mukesh the access to all 22 broadband circles in India but could not yet operate telecom in these circles following the non-compete clause.

By 2010, Anil’s ill administration had already made Reliance Infocomm to beak down to its lifetime low, the company continued to face losses quarter after quarter and was cash-strapped to an extent that Anil Ambani had to diversify his revenues by pushing into new fields.

Consequently, the non-compete pact between the two conglomerates came to an end in May 2010 and with it started a new era of digitalization in India.

RIL spent the next few years laying optical fibres in cities, towns, and – for the first time ever – in villages. The roots that have been laid long ago were now yellow, ripe and ready to be harvested but for just one problem, Reliance Industries did not have enough clientele to make profits.

The telecom sector was then dictated by companies like Bharti Airtel, Aditya Birla’s Idea, and Vodafone, who looted Indians off their coffers.

1 GB internet then cost around ₹249 and in some circles the same plan soared as high as ₹349 per month. People used the internet tightfisted and with care, as though it were their water supply in the middle of the Sahara Desert.

For the first time ever in India was born a company that provided free internet, free calls, and unlimited online TV, the company came to be known as ‘Jio’.

India turns in All Notes In 2016 

Epayments in India had not been very popular until the demonetization that took place in 2016. To curtail black money, and with it the growing tax evasion, the government quashed notes of higher denominations (500 or higher). The entire nation was cash-strapped at once. It was then that companies like Paytm grew to as much as 5 times their initial valuation.

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A few more like Mobikwik, freecharge, PayUmoney came into existence, although not many of them held on for long. It was the advent of digital payments in India.

Executives from paytm roamed places, from shops to shops, setting up merchant accounts on paytm. Once traders started accepting digital payments, customers followed.

Types of Epayments in India

Epayment options in India burgeoned more rapidly than ever after the note ban. Deprived with cash, people started exploring all options for Epayments. Following are the modes with which you can transfer funds online –

  • Electronic clearing service

ECS payments handle bulk and cyclic payments like salary, EMI, interest, dividend etc.

  • National Electronic Funds Transfer

NEFT is one to one funds transfer service and the payments are batched and settled every hour.

  • National Electronic Clearing Service

NECS will credit several accounts at once by debiting a single account from the sponsor bank.

  • Real-Time Gross Settlement

RTGS is settled as soon as the transaction is done, and cannot be rolled back. It does not batch transactions like NEFT.

  • Electronic Clearing Service

ECS mandates bank branches to debit funds from the holder’s account against payment of recurring bills every month or so. Auto-debit is one such example.

  • Electronic Funds Transfer

It is the predecessor to the present NEFT, and has now been phased out. It worked pretty much like the NEFT.

The ‘Google Edge’: The Most Rewarding Epayment Application in India

By 2016, when India’s e-wallet was burgeoning more rapidly than ever, Google revenue had already hit the 90 billion dollar mark. Google, then, was almost 6 times bigger than the entire market of epayments in India now.

The Pichai-led IT mammoth had no problems allotting a small scoop of its revenue from its enormous treasure-chest. The then ‘Tez’ won customers faster than other fund-deprived Indian startups. Only within a month of its launch, Tez had made its way to a million smartphones.

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I once received around ₹900 from Tez, even though I had only transferred ₹150 to my friend as share for the previous day’s party.’

The pace at which Tez grew did not come as a surprise, given the hefty rewards that came along. Caught in the tide of online payment, paytm, too, made a great deal of fortune, especially because it had its reach to more bizarre places than Tez, although the latter remained the first and foremost choice for direct transfer of funds through bank accounts.

A decade back this could only be a dream, internet was thought of as a prerogative of the rich, let alone the idea of owning a smartphone. Jio’s extremely cheap smartphones and next-to-free internet overcame impasses all at once.

WhatsApp Pay in 6 months, says Zuckerberg

Leveraging its 400 million userbase in India, WhatsApp is planning to soon roll out its payment service, which will work on Unified Payments Interface (UPI) developed by Payments Corporation of India.

The already established players – Google Pay, PhonePe, and Paytm – would face stiff competition once WhatsApp gets rolled out. However, WhatsApp licence is still stuck, although the feature seems to be working in Pilot mode as of now. Zuckerberg says the $600 billion company adheres to the policy and is in the phase to setup data centers in India, following RBI norms to store all payments-related data within Indian borders only.

Google, having completely launched its payment service before the localization guidelines, has not been affected, but WhatsApp has, surely. Not much is known about how Facebook with integrate pay in WhatsApp, if it will ever integrate it, though there are speculations that the payment service will only come as an added feature in the attachments sections.

So, you could expect to pay as easily as you send images or docs. Though neither the CEO nor the WhatsApp made any comment on what additional security measures they are willing to take, especially when WhatsApp messenger has previously been under attack numerous times.

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