Google had recently announced that starting next year it is doing away with the web interface for Google Pay and is redesigning mobile apps for both iOS and Android devices. The company also told subscribers that, apart from killing the web version, it will start charging a fee of 1.5% on transfers done through debit cards.
While users in India seldom used the web platform, it was the news about having to pay to transact that left many feeling hard done. For, the Google Pay app was one of a handful that saw robust growth during the Covid-19 led lockdown phase. Thus, it was no surprise that each time a service becomes chargeable, consumers react.
Now it looks like Google has taken a lenient view. It has clarified that the instant bank transfers using Google Pay or Google Pay Business will remain free in India. According to a Google spokesperson, “These charges and fees are specific to the US and do it apply to the Google Pay or Google Pay for Business apps in India.”
To recall, India was the first market where Google Pay launched and helped users make payments via UPI and tokenized debit or credit cards. Google Pay has been the leading digital payment platform in the country and in October alone, it recorded over 820 million transactions over the UPI interface, NPCI’s flagship payment processing system.
Even though in order to offer level playing field to all the players, the NPCI has implemented a 30% cap on the third party transactions, Google Pay remains one of the most favoured payment processing application among the Indians.
In a country like India where prefer cash transactions, Digital payments have gained prominence over the last few years. While a good chunk of transactions continue to be cash-based, the market for cashless has grown significantly in the cities where UPI-based transactions have encompassed all types of business – from the large to the medium and even the micro enterprise such as a roadside fruit seller.
It is worth noting that, when it comes to electronic mode of payments, Credit cards, with 30% market share, are still a preferred mode of payments for high-value transactions. Hence, it will never be a practical idea for Google or any other payment platforms like PhonePe, PayTM or MobiKwik to impose a transaction fee of digital payments. Given that the federal government of Narendra Modi has harped on going cashless, we believe there will be enough pressure on payment gateways to keep their services free.