Jaitley unveils Google’s payments app, says digital transactions will rise again
Finance minister Arun Jaitley expressed confidence on Monday that cashless transactions will bounce back, arresting a decline in recent months from their December peak, as he launched Google’s digital payments app.
With advances in technology and rapid adoption of the Unified Payments Interface (UPI), people who switched to digital payments out of compulsion after the 8 November demonetization will shift back to cashless transactions because of the convenience they offer, Jaitley said.
The highest number of digital transactions was recorded in December in the immediate aftermath of demonetization at 957.5 million, according to provisional data from the Reserve Bank of India (RBI).
The number declined in the later months, as RBI replaced cash in the system. The number of digital transactions was 883.42 million in August—a decline of about 8.4% from December. “In November, December and early this year, a lot of people went in for digitization in terms of mode of payment. It was more out of compulsion rather than finding it a more convenient method to transact but then that compulsion itself created a habit for many. We reached a peak figure and then it marginally slipped and is bound to pick up again,” Jaitley said at the launch of Tez, the Google payments app.
UPI is a payments system launched by the National Payments Corp. of India (NPCI) that facilitates instant fund transfers between two bank accounts on a mobile platform, without the need for including any details of the beneficiary’s bank.
According to Jaitley, Google executives met him in January to discuss the idea of Tez. “The Google team was extremely keen because they saw a great potential, both in the economy and the businesses in India, in joining this campaign.”
Google India has billed Tez as a simple and secure mobile app for digital payments and commerce, built with the goal of connecting the next billion users in India.
It is not a digital wallet like Paytm, requiring a constant top-up of cash. Instead, Tez works with all the 50-plus UPI-enabled banks, so that money stays in users’ bank accounts until they need to use it. Tez users continue to earn interest from their banks and have their deposits backed by bank security guarantees.
The app has been built especially for the Indian market and is available in English and seven Indian languages (Hindi, Bengali, Gujarati, Kannada, Marathi, Tamil and Telugu). Tez works in partnership with four Banks—Axis Bank Ltd, HDFC Bank Ltd, ICICI Bank Ltd, and State Bank of India (SBI)—to facilitate the processing of payments across the UPI-enabled banks.
“Tez was built for India first — and starts us on a journey to make digital payments simpler and more accessible to everyone,” said Caesar Sengupta, vice-president of the Next Billion Users team at Google. “We want to combine the best of Google with the best from our partners...to supercharge digital payments and commerce for as many Indians as possible and help them get the most from every rupee.”