The fintech world in India is buzzing with innovation, all powered by UPI. Walmart-backed PhonePe remains the largest player in the UPI ecosystem, cornering a 48 per cent market share in terms of transaction volume in August’24. It processed 7.2 billion transactions. Google Pay is the second-largest player with a market share of 37.37 per cent, processing 5.5 billion transactions.
As is clear, Google Pay is a dominant force in digital payments in India, but it’s a different story elsewhere. Despite its Indian success, it has struggled to make an impact in the United States.
What’s the secret behind Google Pay’s triumph in India, and why hasn’t it conquered the US market? Let’s unravel this intriguing case!
Why Google Pay worked in India: The rise of UPI
Let’s see how Sundar Pichai-led Google made waves in the fintech market in India.
1. Taking advantage of the UPI wave
In India, Google Pay leveraged the rapid adoption of the Unified Payments Interface (UPI) as a key factor in its success. UPI is a real-time payment system that allows users to transfer money between bank accounts using a mobile device.
This technology revolutionised the way people in India make payments, with transactions becoming faster, more convenient, and more secure than traditional methods. But there was a challenge.
The market already had major players such as Paytm, PhonePe, MobiKwik, BHIM, etc. So, Google knew they had to make a user-friendly online payment app to penetrate the market which it successfully did.
In 2017 the search engine giant released “Tez” a payments app in India which gained immense popularity. After a year, the app was rebranded as “Google Pay” and despite entering the crowded space, it attracted 8.5 million downloads in 37 days and 30 million transactions in 40 days.
2. Partnering with Indian banks
Google Pay also strategically collaborated with several Indian banks to provide seamless integration with their services. This helped the app gain trust and credibility among users, as they could easily link their bank accounts to Google Pay for quick and efficient transactions.
3. Meeting the needs of the Indian market
Another key reason for Google Pay’s success in India was its ability to cater to the unique needs of the Indian market. The app offered features such as bill payments, mobile recharges, and gas booking resonated well with Indian consumers who were looking for a one-stop solution for all their digital payment needs.
Why Google Pay failed in the US
1. Chaos between Google Wallet and Google Pay
Here’s a timeline of Google’s products:
2011: Google Wallet officially launched
2015: Google Wallet was rebranded as Android Pay
2018: Android Pay and Google Wallet were merged to form Google Pay
2022: Google Wallet gets re-introduced in the market replacing Google Pay in most countries except the US.
2024: Google Pay gets shut down in the US and Google Wallet will be available without the P2P payment feature
The timeline of Google Pay is quite messy which can confuse users and hinder its adoption.
2. Competitive market
In the competitive US digital payment market, established giants like PayPal, Venmo, Apple Pay, and Cash App have already claimed their share of the spotlight. Google Pay has had a tough time standing out and gaining a significant market share amidst such fierce competition.
Interestingly, Google Wallet seems to be the preferred choice over Google Pay in the US, with the firm’s blog revealing that the Wallet app is five times more popular than Google Pay.
3. A missed target
Assuming the success of Google Pay in India, the firm thought about bringing it to the United States. However, it was not taken well by users of the US as they preferred Google Wallet.
This led to Google Pay’s underperformance, as it lacked selling points that would attract users and make them switch from their existing preferred platforms. Ultimately, Google Pay had to shut down.
The bottom line
The success of Google Pay in India and its struggle in the US can be explained by a few things: the market, competition, and meeting the specific needs of each place. Google Pay did well in India by using the rise of UPI, working with banks, and focusing on the local market.
But in the US, it didn’t do as well because of strong competition and not being able to attract users. As digital payments keep changing, it will be interesting to see how Google Pay does in different markets around the world.
