EXPERTS ADVISORY

Google launched mobile payment app Tez (Hindi for fast) in India that will let individuals transfer money without the use of a credit or debit card. University of Michigan experts are available to discuss its impact in the Indian market.

M.S. Krishnan is associate dean of global initiatives and professor of technology and operations at the Ross School of Business. He studies business and computer information systems and has led several projects in India.

“This is a classic example of how emerging markets like India are leapfrogging in payment technology,” he said. “A large segment of Indian consumers will skip the traditional plastic card method of payment. We have seen this before when Indian telecom consumers skipped the wired telephone connection and went to wireless phones. In the financial payment domain, the Indian market cannot and need not afford the high transaction fees linked to credit cards.

“Tez is one of the many platforms launched in India. Some of the other platforms are Bhim from the government of India, and the leading banks have their own applications for funds transfer. Given the power of Google’s ecosystem and massive installed base of Android phones in India, if executed well, this can be a game-changer in bringing convenience, transparency and efficiency in the Indian economy.

“This will not be the last payment platform to be launched in India. The market size is huge and will attract more players. Similar to Alipay in China, we should expect other firms with strong ecosystems such as Facebook or Amazon to enter this market. Customer convenience, ease of usage and broader acceptance in the network will be the success factors here. We are witnessing a disruptive shift in how P2P (person to person), P2M (person to merchant) and M2M (merchant to merchant) payments will happen in India.”

Contact: mskrish@umich.edu, 734-763-6749

Puneet Manchanda is the Isadore and Leon Winkelman Professor of Marketing at the Ross School of Business. His areas of expertise are business in emerging markets, business in India, strategy and marketing. He has also studied China’s Alibaba Taobao traffic and mentioned digitization of economy in his forecast.

“The electronic payments opportunity is poised to explode in India due to a unique confluence of forces—the increasing penetration of smartphones, the wide adoption of UPI by banks and the push away from cash due to demonetization,” he said.

“Google’s entry into this market with Tez represents a two-pronged strategy. First, to pull current users even more into the Google ecosystem (a Google account is needed to use this service), providing rich visibility into individual level (financial) behavior.

“Second, to expand into the vast non-English speaking hinterland, a market where a digital revolution is taking place. For the Indian consumer, this product represents more choice, which is generally a good thing, but also the possibility of getting walled in by Google, which may not be such a good thing.”

Contact: pmanchan@umich.edu, 734-936-2445