Updated: Feb 5
Indian tech payments giant, Google Pay is facing repeated shutdowns and it is affecting its consumer base.
What is happening: It’s been a tense week for those at the India division of payments giant Google Pay.
Google's parent, Alphabet recently parted ways with 12,000 employees on a global scale, worrying the staff spread across India and Singapore, are bracing for the cut.
Why it matters: Google Pay India is one of the few payments teams globally with end-to-end autonomy—a distinction that sets it apart from other geographies.
Despite an exalted status globally, Google Pay India’s fate remains uncertain which is partly rooted in a recent shift in product strategy for Google Pay Brazil.
Backdrop: This shift comes when India’s real-time digital payments system, the Unified Payments Interface (UPI), is flourishing at a ~70% monthly growth rate.
It lost the top spot to PhonePe, and the distance has only widened since.
The big picture: The major factor weighing down Google Pay is its increased reliance on big Indian banks serving as its tech partners.
As the payments landscape readies for credit cards on UPI, maintaining deeper relationships with merchants and retainining consumers is its new challenge.
The bigger picture: Google Pay put up somewhat of a fight to secure offline merchants but it abstained from acquiring online merchants until late 2022.
Had they acquired them earlier, Google Pay would have been able to get in the thick of the money flow, enabling quicker settlements for merchants.
Probably delayed due to significant investment on google pays part is likely that Google Pay avoided this path because online merchants require a significant amount of support from payments providers, as they rely heavily on digital payments.
By the numbers: To retain loyalty, Paytm in 2019 launched the SoundBox, a hardware made to enable merchants to know when a payment is received.
Then in the year ended March 2022, Paytm made 38% of its revenue of ~Rs 5,000 crore (~US$610 million) out of services.
What's next: Google will need to reinforce its position not just within Google, but also in India’s payments ecosystem, once again.
Catch up Quick: Google Pay is now in a precarious position and needs to fix its standing and retain its consumer loyalty to stay stable in the current economic situation.