A limitation on Paytm’s ability to engage in banking operations beyond February 29 by India’s Reserve Bank has put the country’s fintech behemoth in a bind.
Paytm, which was started in 2010 by Vijay Shekhar Sharma—who became famous as the face of digital payments following demonetization—is currently unable to process deposits, FASTag transactions, or credit transactions through any of the main financial institutions.
As they say “Someone’s loss is another person’s gain”! Exactly on the same lines the rival fintech companies are scripting their new expansion stories. Businesses that accept Paytm as payment have been approached by field agents from companies including Google Pay, Yes Bank, HDFC Bank, and PhonePe. To get a piece of this burgeoning industry, SBI is also actively engaging with domestic and international tech companies to extend its sound box network.
The development has shocked users. The Paytm website claims that the company’s customer base in India exceeds 300 million people. Following its first public offering in 2021, the company’s finances began to deteriorate. Building a sizable loan book, it has been attempting to become profitable and expand into additional segments ever since. Laid off 1,000 workers over a few months is another cost-cutting measure.
According to specialists in the field who spoke with various media outlets, Paytm’s credit operations have nearly stopped and earnings streams have come to a standstill as a result of the regulatory crackdown. This is happening even though probes into the firm are still ongoing.
After facing serious allegations, industry analysts predict the company may face the loss of its licence. Paytm is a shining light in India’s startup scene, and if that happens, it would be a black day for them. Until 2022, the business served as the official title sponsor of all cricket matches played by the BCCI, both at the international and domestic levels. In 2023, it partnered with Ticketmaster for the Indian Premier League playoffs and final.
This disaster has occurred just as investment in the financial technology sector has begun to decline. According to a Tracxn FinTech Report, the third-highest funded ecosystem in the world—India’s fintech sector—saw a 63% drop in funding to $2 billion in 2023 from $5.40 billion the year before.
Latching to the Opportunity
According to industry watchers, if Paytm goes under, customers may go to other financial apps, which would be good for their competitors.
Amid the continuing crises, news surfaced recently that Mukesh Ambani’s Jio Financial Services Ltd was among the leading bidders for Paytm’s wallet business, sending shares of Jio soaring by more than 15%.
“It would appear that businesses and customers are increasingly turning to alternative QR code platforms, UPI, and wallet transactions as a result of the aforementioned RBI injunction against Paytm.” According to Aviral Jain, Managing Director, Valuation Advisory Services at Kroll, “This disruption period could be short-lived if Paytm can resolve quickly,” meaning that competitors of Paytm have a good chance to gain a larger portion of the market.
From a business-to-business standpoint, the effect is more on the company’s bottom line than on Paytm’s reputation, albeit the latter will feel the effects in the medium run. Paytm must instill extra trust in its customers to avoid irreparable harm to its brand during this period of interruption, as Jain pointed out that gaining customers’ trust takes time.
For Paytm’s senior executives, the most pressing issue is calming nervous investors and forming alliances with financial institutions to support its Unified Payments Interface (UPI), wallet, and other merchant services. The firm also has the difficult challenge of transferring loan repayment customers from Paytm Payments Bank to other banks.
The top bank is already pressuring financial institutions to increase their net interest margins and reduce their high loan-to-deposit ratio; Paytm may encounter resistance from hesitant banks even if it simplifies these difficulties.
Additionally, there is the issue of a significant lack of end-user communication, which may eventually cause a retention problem. Nevertheless, the senior executives of Paytm assert that they are fully aware of the situation and want to implement a comprehensive marketing and communication campaign to alleviate these concerns and redirect users to partner institutions.
In the meantime, 42% of Indian Kirana stores have begun accepting payments through other applications, according to a Kirana Club poll. According to the research, Paytm used to have over 69% of the Kirana shop market. The poll also uncovered another shocking fact regarding the level of trust that local retailers have in Paytm. Some 42% of Kiranas have shifted to utilizing different payment apps, and 20% more have said they plan to do so soon. Among merchants that have implemented or are considering implementing alternative payment apps, 50% have opted for PhonePe, 30% are leaning towards Google Pay, and 10% are leaning towards BharatPe.
The National Payments Corporation of India was formed in 2008 with the objective of integrating all payment mechanisms existing in the country and making them uniform for retail payments. However, the majority of the population was opting for cash payments as retailers encouraged this method. There was also the problem of almost half the population that had no access to any form of banking service. This also precipitated the issue of black or illegal money and corruption within the country.
By 2012, the RBI had envisioned building an authorized payment and settlement system that was safe, efficient, accessible, inclusive, and interoperable. This was done as a part of the Green Initiative and to encourage the lesser use of paper in the domestic payment market. UPI was officially launched in 2016 for public use.
The CEO of Netmagic Solutions says UPI has become one of the most successful deep-tech innovations coming out of India. It works on an interoperable four-pillar push-pull model. There is a beneficiary at the front end, the payment service provider, and a beneficiary back end bank that settles the monetary transaction for the users.
As it began to gain traction and prominence in 2019, the Ministry of Finance nullified the Merchant Discount Rate (MDR) on UPI which catapulted the number of low-value transactions, making huge gains on real-time transaction volume data.
From 1st January 2019, UPI became a popular payment option for IPOs. By March 2020, the transaction limit was increased from INR 1 lakh to INR 2 lakhs, which was again increased to INR 5 lakhs in December 2021 for Retail Direct Scheme and IPO applications.
In its first monetary policy of FY 2022-2023, RBI has proposed using a UPI-based QR code for a cardless cash withdrawal facility from ATMs. ToneTag launched VoiceSE, in partnership with NSDL Payments Bank and NPCI, which will enable users to make UPI payments using voice in Hindi, Tamil, Telugu, Malayalam, Kannada and Bengali language. In 2021, the value of UPI transactions was more than INR 73 lakh crores, recording a 110% rise from INR 33.87 lakh crores in 2020.
The Volume of UPI-Based Digital Payments Across India from FY17 to FY22
Within two years of its launch, by 16th August 2018, UPI 2.0 was launched enabling their users to link Overdraft accounts to a UPI handle. There was an added feature of the AutoPay facility for recurring payments, and users were able to pre-authorize transactions by issuing a mandate for a specific merchant. The newer version also included a feature to view and store the invoice for transactions.
By August 2021, Bank of Baroda, Paytm Payments Bank and State Bank of India were live on UPI AutoPay and registered 204,000, 186,000 and 660,000 mandates respectively. Plans were in place for NCPI to expand AutoPay to international markets and operationalize real-time payment dispute resolution covering 90% of complaints by September 2022.
RuPay credit cards were allowed to be linked with UPI from 8th June 2022. Currently, NPCI is working on a real-time feature that will reduce the time period taken by banks to unblock funds over time-out or transaction from 24 hours to 30 seconds.
Continuing the growth of UPI and its features, the RBI Governor launched UPI 123PAY on 8th March 2022, offering 4 payment options to UPI users:
App-based functionality where a mobile phone manufacturer can install a UPI app through over-the-programming that can be used for payment.
Missed calls through which customers can use a dedicated merchant payment number by giving a missed call. The incoming authentication call will ask for PIN verification to complete the transaction.
Interactive Voice Response (IVR) based where the payment transaction will complete using pre-defined phone numbers.
Payment in offline mode through sound-based proximity data communication.
On 17th November 2021, NPCI International Payments Limited signed an MoU with PPRO Financial, a UK-based financial services firm, to expand the acceptance of UPI into foreign markets, specifically in China and the US, which accounts for half of all transactions from India.
Onboarding of NRI/NRE Accounts
Earlier this month, the National Payments Corporation of India (NPCI) released a notice stating that Non-resident accounts like NRI/NRE accounts attached to international mobile numbers will be permitted to transact with UPI. To begin with, mobile numbers of ten countries will be enabled. These countries are Singapore, Australia, Canada, Hongkong, Oman, Qatar, United States of America, Saudi Arabia, United Arab Emirates and United Kingdom.
The NPCI, in its notice, has clarified that these accounts will be permitted to transact as long as the member banks ensure strict adherence to FEMA (Foreign Exchange Management Act) regulations and the guidelines issued by the RBI (Reserve Bank of India). All the UPI members including banks and payment platforms have been instructed by the NPCI to ensure that they are completely compliant to all the legalities by April 30, 2023.
Lauding this move, Rajsri Regan, Head of Development – Banking and Payments, India & Philippines, FIS said – “NPCI has been working to expand and boost the use of UPI across the world and this move will widen the use of digital payments as Indians living overseas will also be able to make instant transactions.” This facility will soon be extended to mobile numbers of other countries as well.
Will UPI Become a Paid Service?
The Ministry of Finance’s Tweet About UPI Services
The government had made transactions over UPI free of cost to encourage faster and deeper penetration of digital payments post demonetisation and especially, the pandemic. This is the government’s zero MDR (Merchant Discount Rate) framework in which neither the customers nor the merchants pay for utilizing UPI services.
However, in a discussion paper that RBI released in early August 2022, it said that as a fund transfer system bears a resemblance to the IMPS (Immediate Payment Service), the charges in UPI need to be similar to the charges that are applicable in IMPS for fund transfer transactions.
Furthermore, UPI service providers like PhonePe, Google Pay and Paytm Payments Bank have not earned any revenue for the last couple of years for their services. Industry executives are debating that with the setup and adoption of a robust digital payment infrastructure the time has come for them to earn revenue from these transactions so that more players are enticed to enter the UPI service space to build further financial inclusion.
The Finance Ministry has stepped in very recently and has tweeted – “UPI is a digital public good with immense convenience for the public and productivity gains for the economy. There is no consideration in Govt to levy any charges for UPI services. The concerns of the service providers for cost recovery have to be met through other means.”
UPI payment platforms like Google Pay and Paytm have amassed millions of active users and have a deep data mine to access to fine-tune their products. Also, they have other avenues for revenue building. The payment platforms earn a commission from the service provider whenever there is a bill payment for utilities like electricity and water as well as mobile recharges and DTH recharge payments. To these payment platforms data substitutes for revenue to a certain extent.
In the immediate future, it remains unlikely that UPI will become a paid service.
Conclusion
The penetration and adoption of UPI continues to grow as the service itself seeks to grow and expand to include more and more features. While the future is bright for the UPI platform, it will be a wait-and-watch game to see whether the service in the future might attract charges or not.
FAQs
What is UPI?
UPI stands for Unified Payments System. It is a system developed by the National Payments Corporation of India that supports multiple bank accounts in a single mobile application. It facilitates inter-bank, peer-to-peer, and person-to-merchant transactions.
Will UPI become a paid service?
There has been suspicion among the people that there may be the possibility of UPI transactions carrying a service charge. However, to clear people’s suspicion, the Finance Ministry recently made a tweet saying that there is no consideration in Govt to levy any charges for UPI services.
Company Profile is an initiative by StartupTalky to publish verified information on different startups and organizations. The content in this post has been approved by Google Pay.
Do you want a single platform for managing UPI money transfer, phone recharge, QR code payments, bill payments, and other cashless transactions? Your search ends with Google Pay. A robust platform that enables you to go cashless, Google Pay has established itself as one of the top names in the digital payments segment. Bank transfers, sending and receiving money, online shopping, and several other services have become as easy as cracking an egg with Google Pay.
Millions of Indians now rely on this Google offering for all their payment-related needs. And the number continues to increase with each passing day. StartupTalky covers the Google Pay success story in this post. So, dive into it below:
September 11, 2015, and then renewed on January 8, 2018
Website
pay.google.com
Google Pay – Latest News
December 21, 2021 – Google Pay and Mastercard ties up to enable the GPay users to transact with their Mastercards via token, without having to use their debit card details.
Google Pay, often referred as G Pay is founded on May 26, 2011. Starting initially as Google Wallet, the digital payments platform has changed its name to Android Pay later on September 11, 2015. The app was then launched as Tez before finally settling on the name Google Pay on August 28, 2018.
Google Pay serves as a digital wallet-cum-online payment system developed by Google. The Google-powered digital payments platform enables the users to make contactless payments and purchases online via android phones, watches and tablets. iOS is another platform that supports G Pay for the users of India and the United States but with some restrictions. Google Pay works with Android Lollipop 5.0 and above.
The second most popular UPI platform in India helps the users to pay other merchants and individual users via the Tez mode, using QR codes, and through phone numbers.
The app is currently available for the users of 42 countries, as of 2021.
Google Pay was originally developed as Android Pay and was first released at Google I/O in 2015. This application was primarily modeled on Google Wallet that was released back in 2011. The technology of Android Pay was influenced by Softcard’s technology. Google then launched the payments app, Tez on September 18, 2017, pivoting the UPI system. Tez was later rebranded to Google Pay on August 28, 2018.
According to Sujith Narayanan, the Co-founder of Google Pay, it was while working on Google Tez (another offering by Google), he and his team realized that a consumer’s financial journey extends beyond digital payments. Moreover, there was a need to concentrate on the millennials in India and give them a new, fast and efficient way to handle their finances.
The founding duo finally decided on a product called ‘Google Pay’, which would redefine financial services for the millennials. Google Tez, a mobile payment service by Google that targeted users in India, laid the framework for Google Pay. Think of Google Pay as a superior version of Google Tez coupled with a plethora of offerings.
Google Pay – Founders And Team
Sujith Narayanan and Sumit Gwalani are the brains behind Google Pay.
Sumit Gwalani (left) and Sujith Narayanan (right)
Sujith Narayanan
Sujith Narayanan is the co-creator of Google Tez along with Sumit. Sujith is a veteran payments executive and has an enviable experience in the domain of financial services. He is also known as the co-founder of the neo-banking startup EpiFi. Sujith is an alumnus of the University of Calibut and Mahatma Gandhi University. Starting his career with Standard Chartered Bank, Sujith eventually resigned after 7 years as a National Sales Manager of the organization. He then joined Religare Macquarie Private Wealth as the Vice-President – Marketing and Channel Development before moving on to join Google.
Sumit Gwalani
Along with co-founding G Pay, Sumit Gwalani played an instrumental role alongside Sujith in starting EpiFi. He handled Google Tez’s operations in India. Sumit spent 12+ years at Google where he donned multiple hats. Sumit was a Research Assistant at the University of Columbia, Santa Barbara, before joining Trlokom as a Software Architect and eventually joining Google. Gwalani was a Computer Engineering student at the University of Mumbai from where he completed his Btech degree before pursuing a Masters in Computer Science from the University of Santa Barbara.
Google Pay – Name, Tagline And Logo
Google Pay is styled as G Pay. The logo of G Pay is cleverly crafted with the Google logo on one side and “Pay” on the other.
Google Pay’s tagline is “Money made simple”. A meaningful and interesting tagline, isn’t it? With Google Pay, handling money has become easier than ever.
Google Pay Logo
Google Pay – Business and Revenue Model
Google Pay does not charge its users for their access to Google Wallet. GPay allows its users to send money to bank accounts directly and for free. Previously, the company had an agenda of adding a 2.9% fee upon topping up wallets via debit card, which has been taken off.
Being a digital payments platform, Google Pay mainly collects its revenues via transaction-based fees that it collects from the online and in-app payments of the banks and merchants. Advertisements and product offers within the Google Pay app are some other revenue streams of the company. It also earns considerably by using the users’ data that it collects.
In 2017 Google Pay had earlier witnessed a growth of its monthly active users, which was recorded at 67 million. The same has presently estimated at 150 million, as of 2021.
The app has enabled more than 2.5 billion transactions and currently has got a running rate of US $110+ billion in transaction value. Moreover, it is also important to note that now Google Pay also gives the users the privilege of paying over 200,000 stores that are based in more than 3500 cities and towns, and to 2700+ online merchants.
Google Pay – Challenges Faced
With the backing from Google, one of the largest organizations in the world, Google Pay wasn’t subjected to the problems that small-scale businesses and startups face while starting out. Neither was there any dearth of resources. Though not exactly a challenge, a technical glitch on Google Pay’s app in 2020 did become a trending topic for some time.
Several users reported the app saying that their bank accounts were removed from Google Pay without any notice. Complaints on the matter were frequently posted on social media platforms. However, the issue did not bring about any serious consequences. The Google Pay team suggested that it might have been an unintentional action on the users’ part that delinked the app and bank accounts. A fix was implemented by the team and the situation was restored to normalcy. Google India issued a statement when it was asked by NDTV Gadgets 360 regarding the glitch.
Ambarish Kenghe, the Director of Product Management at Google Pay said, “We are aware that some users faced difficulties with linking their bank accounts on Google Pay today. The issue, impacting a small number of users, was identified earlier today and our teams have worked to resolve it and have implemented a fix within the hour. The issue stands resolved and users will now be able to use the app normally. Users facing any issue should reach out to Google Pay support through our app. We regret the inconvenience caused and are committed to providing our users a seamless payments experience.”
Google Pay – Growth
In the year 2018-19, there was a lot of traction with the payment products. The team launched a few new features successfully and also revamped the payment products globally. Google Pay specially focused on partnerships, ecosystem approaches as it forged deep relationships with central bank and government to build innovative products collectively. This made the products work together within the ecosystem.
GooglePay currently retains 35% market share in terms of volume and 38% of the shares in terms of values, as of October 2021. The payments gateway has last recorded 129 crore transactions, which amounted to Rs 2.50 lakh crore. Some growth highlights of Google Pay are as follows:
Google’s digital payment platform Google Pay hit 67 million monthly active users in just 2 years since it made its debut in India
Google Pay had contributed 59% in digital transactions in 2019
Google Pay is the second most popular UPI platform after PhonePe
Google Pay has partnered with numerous organizations around the world to date. Here are some of the most prominent partnerships seen by G Pay:
GPay has announced of its collaboration with SBI General Insurance, which would help the GooglePay users to purchase SBI’s Genearl Insurance plan directly via the app on October 29, 2021
The digital payments giant has partnered with Visa on September 21, 2020 to help the Visa card users to tap-to-pay, thereby securing all the transactions made via the app
G Pay partnered with 90 banking institutions from 9 nations on September 20, 2021
Google Pay is firmly partnered with India’s financial ecosystem, said the internet major on September 3, 2021
G Pay partnered with Leumi, an Israel-based bank to enable the bank’s users to use the Google pay digital wallet on September 2, 2021
Amazon Pay is a platform for digital transactions. It is similar to Google Pay in terms of functionality and features
PhonePe is popularly known as India’s leading payments app. It allows people to use BHIM, UPI, credit card, and debit cards to recharge phones and make payments
Paytm is an Indian e-commerce payment system. Paytm offers multiple services through its ecosystem; some of them are e-wallets, bill payments, phone recharges, and an online shopping store (in the form of Paytm Mall). It is headquartered in Noida, India.
Google Pay is always planning something new and unique for its users. The company has announced that it would be transforming its app into a personal finance hub for the users. This would further simplify the payment of funds to friends and family.
Google Pay – FAQs
Is Google Pay an Indian app?
Google Pay is based out of the Google headquarters in California, US. However, the payments app of Google is available for the Indian users and those who resides in Singapore and the US. Google India Digital Services Private Limited, headquartered in New Delhi, makes G Pay accessible for the Indian users.
Who is the owner of Google Pay?
Google Pay is owned by Google Inc.
Can I transfer funds directly to bank accounts via Google Pay?
Yes, Google Pay allows its users to link their bank accounts and transfer funds directly to others’ bank accounts.
Google Pay is a digital payments app that is a subsidiary of Google. Google Pay is a digital wallet that was initially released in the year 2015. It is one of the most commonly used digital wallets in India. Recently the company has announced that it would let users to send money through Google Pay from US to India and Singapore. Let’s look at the further details of this new feature offered by Google Pay.
Google Pay has announced that it would let users in the United States to send money to their friends, family and relatives in India and Singapore. This is an official mark of the entry of Google Pay into the remittance service market.
According to World Bank, India is one of the biggest overseas remittance receivers even though in the year 2020 the country had seen a drop in the remittance received of around 9% to INR 5,58,100 crores due to the global economic slowdown and the coronavirus pandemic.
There has been a rapid growth in the foreign remittances with the increase of migrant workers in the developed countries across the globe.
Banks that are eligible to Transfer money through Google Pay
Google has partnered with Western Union and Wise in order to provide the new service through the Google Pay app. Google had conveyed in a blog post that Western Union will offer free transfers while sending money through Google Pay until the 16th of June.
Google has also conveyed that Wise will provide free transfer only for the first time the customer sends money through Wise on transfers up to USD 500 (around INR 36,700). However, Google has not yet officially announced the exact transfer fee that will be charged by the service provider after their series of free transfers.
Limitations of Money Transfer through Google Pay
One of the major limitations of this new foreign transfer feature or service provided by Google Pay is limited only to two countries that is India and Singapore. However, the tech giant has conveyed that by the end of the year they have plans to expand their services to around 280 countries globally.
Another important point to be noted is that the foreign transfers through the Google Pay app are limited to individual users. This means that the new feature doesn’t let the individuals from the United Statestransfer money to any business organizations in India or Singapore.
Another important point to be noted is that users from India will not be able to transfer money to the United States. This feature or service will be available for the US users using Google Pay app.
Steps to Transfer money from US to India through Google Pay
Here are the steps to be followed for the users who would want to send money from the US to India or Singapore.
Step 1 – To send money through Google Pay, firstly you will have to search the user on the Google Pay app.
Step 2 – Tap the pay button and choose either Western Union or Wise.
Step 3 – You will have to ta continue and see the exact amount of money that the recipient will receive.
Step 4 – Again Tap continue and choose how would you want the recipient to receive the money, you will be able to choose between UPI or through cash pickup.
FAQ
Does Google pay require a bank account?
Yes, Google Pay requires a bank account.
Is Google pay available in USA?
Google Pay is available in USA and You can also send money from US to India.
Can I send money from USA to India using Google pay?
Google Pay will now let users in the US to send money to their friends and families in India and Singapore.
Conclusion
The new service would enable the tech giant to mark a spot in the foreign remittance market. The company plans to expand to more than 200 countries and territories to Western Union and around 80 countries through Wise by the end of this year.
Google began as an online search firm, but it now offers more than 50 internet services and products from e-mail and online documentation for mobile phones and tablet computers. In addition, the 2012 acquisition of Motorola Dynamics has put it in a position to sell hardware such as mobile phones. Google’s comprehensive product portfolio and size make it one of the top four impressive companies in the high-tech market with Apple, IBM, and Microsoft. Despite these innumerable products, its original search tool remains the origin of its success. In 2016, Alphabet earned all its revenues from Google advertising on the basis of users’ search requests.
The Google Inc business model can be seen more clearly when it is divided into a few key areas:
Key Partners: Google’s key partners include Suppliers, Distributors, Open Handset Alliance, and Original Equipment Manufacturers.
Key Activities: Key activities include research and development for both the development of new technologies and features and the improvement of existing ones. Significant time is spent in the maintenance and management of large-scale IT infrastructure and products and services. Apart from this, work is done on marketing, strategy and alliances.
Key Resources: Google’s core resources will include data centers, servers and other IT infrastructure, IP as well as human resources. Other resources include patents, licenses and proprietary materials.
Value Proposition: The company aims to create value for its customers for internet search, advertising, operating systems and platforms, and the enterprise. The overreaching principle is derived from the mission statement to manage the world’s information and make it universally accessible and useful.
Channels: Channels to reach customers include google.com, Google affiliate website, and Google Ads Words. Sales and support teams are involved to reach advertisers and network members.
Customer Relationships: The channel can include sales and support services as well as a dedicated team for large customers to build customer relationships.
Customer Segment: Google has three main customers. Users who are able to organize information in a useful way using Google products and services, advertisers who have an effective way of displaying online and offline advertisements for customers and members of the Google Network and other content providers, Those who use the Ads Sense service. Other expanded segments may include mobile device users and manufacturers and developers.
Google’s Business Model Change Over The Next Ten Years?
Here are the Major Trends:
Search traffic is moving to mobile and voice. This reduces advertising revenue
Advertising is moving from traditional to digital. This increases advertising revenue.
Servers and services are moving to the cloud. This increases cloud revenue.
Supporting-based tools are ecosystem coalescing. The effect is… complicated.
AR / VR. Google’s bet is on phone-based VR.
The magnitude of trend 2 surpasses the magnitude of trend 1, so Google’s advertising revenue will continue to grow indefinitely.
Trend 3 is all the opposite. The main question is whether they can hold on to Amazon and Microsoft, and if not, can they build a fairly profitable business from third place. Strategically, they are unlikely to make major changes to their cloud strategy until they exit the market entirely, which seems impossible.
Trend 4: The instrument, is an interesting one. This is an important new market for Google which, in the best case, outperforms other tech companies in profits. This is their best chance to build a huge new profit center. The Google device is well-positioned to win the competition. They have better AI than Amazon and Apple, they have a phone that Amazon doesn’t, and they have a successful speaker device, which Apple doesn’t. However, things can change rapidly, such as Amazon launching a successful phone.
It is also unclear how big the market will be. Google’s system, which makes phone calls on your behalf, hints at the size Google sees in this market: Vishal. If Google is able to use AI to transact with humans, then a whole host of tasks will be automated and the value will be very high. This would be so disruptive that they would have to carefully consider the social consequences. But it represents another revenue source with advertisements. On the other hand, if accessories remain merely a technological toys, then Google won’t really lose anything. Like trend 3, it is all upside down.
Trend 5 has no upside or downside for Google. If it turns out Google is right, then AR / VR will not be a significant revenue source for anyone. If they are wrong, some other company will get rich. This is a big trend in the industry but one Google is staying away from most.
So overall, Google’s big business model shift will be a new AI-based device and services ecosystem. This is his big bet for the coming decade
Google’s Other Products
Google Other Product
Some of Google’s other basic products include:
Google News: The service started in 2002 as an automated service, which summarizes news items from multiple websites.
Google Fiber: The Google Fiber Project began in 2010. The plan was to build an ultra-high-speed broadband network in some US cities. Kansas City was chosen as a pilot project, and the project was completed in 2012.
Google Phone and Android OS: Google launched Android, a mobile phone operating system in 2007. Google acquired the OS as open-source software and allows developers to use software development kits to develop applications. Google also released a phone called Nexus One.
Google Chrome: Google Chrome was announced in 2008 as an open-source web browser. Google Chrome OS was launched in 2009 as a Linux-based operating system. The OS only supported a web browser, which is used to log people into their online Google accounts.
Google Goggles: This is a mobile application for Android and Apple iOS. It is used for image recognition and image-based searches. The application can identify historical sites, scan business cards and even solve riddles.
Google launched the ‘Shopping’ tab to enable users to flip through the products and direct them to the merchant websites or e-commerce platforms when searching for products to buy in June 2020. Similar to the News and Image tab on Google, the shopping tab allows users to seamlessly control their search by putting necessary filters and browsing the desired product through listing on different websites. Google has collaborated with e-commerce players such as Flipkart,Paytm Mall,Myntra, Koovs, etc., to join the company’s shopping tab initiative.
“We are always exploring options to help consumers find the products they want to buy more quickly and efficiently from local merchants,”
The Google spokesperson confirmed the latest initiative in an email response claiming that the feature will facilitate customer online shopping more efficiently from the local merchants as well along with e-commerce players. Reportedly, Google has collaborated with the leading e-commerce platforms including Flipkart, Snapdeal, Myntra and Paytm Mall on board in their latest project.
Besides, the search giant also intends to tap the SME space from local Kirana stores (like JioMart) to expensive art collection stores whose merchants are not necessarily listed on the e-commerce players’ websites. The ongoing talks between Google and retailers both big and small will help the search giant understand the country’s shopping trends. These local merchants need not necessarily list on platforms like Amazon or Flipkart.
Another Google spokesperson said, “ They (Google) will partner with retailers of all sizes. It can tell the user where the product is available, is it available online, etc. For now, this service is being provided free of cost.”
Through Shopping Tab, Google lists products through its ‘product listing ads’, the Shopping tab will give users a lot more control. For instance, users can filter the product they are looking for based on price or any other attributes such as price, seller, delivery, department, colour, shape, and so on…, while also getting more details of the product by going to the ‘details’ page.
Google Shopping Tab allows users to filter Products
The most popular search engine operating company, Google was functioning the Shopping tab in 30+ countries when last reported in June 2020. On the merchant side, anyone with a product feed can plug into Google’s merchant centre to be listed on the shopping tab. On the user side, the tab has also seen high rates of engagement, largely due to the specificity that product search allows filter by attributes. With 80-85 million online shoppers, India is an important market for Google.
Google Funding And IPO
The company got its first financing from Sun Microsystems co-founder Andy Bectolsham. The company had financed 100,000 US dollars before the incorporation. Page and Brin tried to sell their website for 1 million US dollars in 1999 because they thought it was distracted by the work of their PhD. They went away and went to secure $25 million in funding from major investors. Among them, Cleaner Perkins Kaffield and Biers along with Venture Capital companies like Secucau Capital were included. The company’s IPO was five years later. 19, 605,052 shares were presented at $85 per share on the August 19, 2004 IPO of Google. Morgan Stanley and Credits were underwriters for Suisse Deals and an online auction system was also prepared for the sale of shares. The valuation of Google at IPO was $23.1 bn. Sales were worth $1.67 billion and by 2014, the company’s market capitalization was then worth $23 billion, which increased to $397 billion.
The company has secured around $36.1 mn in funding:
Date
Name of the Funding Round
Funding Raised
June 1, 2000
Funding Round
$10 mn
June 7, 1999
Series A
$25 mn
November 1, 1998
Angel Round
$1 mn
August 1, 1998
Angel Round
$100 K
The company retained control of most shares. There were mistakes that the IPO will impact the company’s culture through the impact of the company, such as a sudden millionaire situation of shareholder pressure and many officers on paper. The founders addressed these concerns and assured potential investors that the company’s culture will remain intact. To ensure that it is continuing, the company has a designated main culture officer. This role is served by the director of human resources and its purpose is to ensure that culture and methods are developed and maintained and be kept right for the original values that form the company’s base. Over the last few years, there were concerns and suggestions that the company has lost a bad way of anti-corporate thinking and has also given some allegations about sexuality and age. However, none of them turned out to be true.
Google Interesting Facts
The name of Google is taken from Googol, which is equal to the number 1 after 100 zero (1 x 10 ^ 100).
The original name for the backrub search engine was until Sergey Brin and Larry Page Google’s URL Google, Inc.
Google registered its domain on September 15, 1997.
Google’s URLs are often misspelled. For example, the user queries of Google, often become www.gooogle.com, www.gogle.com, and www.googler..com, however, all of them are owned by Google, Inc.
According to the 2013 PU Research Center survey, most Internet users (about 56%) have to use Google to find information about themselves
The Google search technology is called PageRank.
Withholding a dominant 91.94% market share, when last reported in 2021, Google is the biggest search engine.
Google has an enviable 24.4 million followers on Twitter.
Google turned out to be unreachable for 5 minutes on August 16th, 2013. It was found that on that specific time interval, global internet usage saw a fall of 40%.
We all know Google has a Twitter account. But do you know Google’s first tweet? You would be surprised that the first tweet that came from the colossal search engine operator was: “I’m feeling lucky” in binary code.
Google has made its homepage available in 80+ languages.
Google’s revenues mostly come from the advertisements it features. It drew 89% of its revenue from advertisements in 2014.
King of Online Search: Google is the undisputed king of the online search engine division. It processes about 2% of world questions.
Huge Market Share: Currently, Google has a 28% share in the worldwide desktop searches market.
Invincible: So far, no competitor has come close to challenging its position, let alone its market share in the search engines.
Largest Traffic Generator: Every month, this powerful brand generates over 1.2 billion hits. It is the largest traffic generator and has a clear advantage over its competitors such as Bing, Yahoo, Baidu.
High Revenue: The huge revenue of $65 billion (2017) that Google has gained through various partnerships with various sites has ensured its growth.
Adaptability: Google has successfully adapted mobile and Android technologies, giving Apple the ability to compete directly with the iPhone
Google’s Weakness
Reputation is being affected as users and governments feel that they do not up to their social corporate responsibility.
For example not paying enough tax on profits. The social network site Google Plus has failed and will be shut down. The main income is from advertising revenue. This can be a problem if advertisers decide to cut their costs.
Dependence on the Internet
Minimal physical presence
Google’s Opportunity
Wearable market: In November 2019, Google acquired Fitbit for $2.1 billion to compete with Apple and Samsung in the attractive and growing wearable (smartwatch and fitness band) market.
Android OS: The most important opportunity for Google is its noticeable efforts in Android operating system provisioning. This has strengthened their chances of competing directly with Apple iOS.
Google Glasses and Google Play: Google is set to market its newly launched Google Glasses and Google Play. This can boost the progress and development of Google.
Cloud computing: With its storage and cloud solutions, cloud computing can play a significant role in Google’s marketing enterprise. In January 2018, Google introduced a new digital store, which provides cloud-based software to all organizations. Correspondingly, the company also launched Mobile Iron, Inc., To integrate its Orbitra Commerce platform with Mobile Iron’s app distribution, security, and analytics capabilities.
Non-advertising business model: Google needs to start a diversification process and aim to create a non-advertising business model accordingly. There is a need to further enhance adaptability by committing to more commercial transactions. This will ensure permanent revenue
Google’s Threat
Market Shares Decline: According to data gathered from Emarketer, Google’s US digital advertising revenue is expected to see a decline in market shares. It was 38.8% (2017), 37.2% (2018). The reason for this is the increasing competition from Facebook, Amazon, Instagram, and Snapchat for advertising market share.
Gender Bias: A Google memo published by its employer James Damore has sparked a strong debate on the issue of gender bias and free speech in the company, highlighting its diversity policy.
Change Of Information: China has drawn a lot of criticism over its alleged cooperation with China on the search engine project (Dragonfly) by the censors. Antitrust controversy: Google has been involved in antitrust disputes for years with US and EU lawmakers. Anti-EU antitrust regulators fined EUR 5 billion which Google has sought to challenge.
Censorship Policy: Google has not managed to protect itself from backlash over its censorship policy. Many whistle-blowers have started leaking about its political, and ideological leanings.
Competitors: Google is the primary threat from its rivals Facebook and Amazon. Both competitors are slowly joining up with Google. Their new features and increasing popularity can take the headlines away from Google.
Google’s SWOT analysis shows the strengths, weaknesses, opportunities, and threats of the largest online search engines. The popularity of Google allows it to enjoy huge profits.
The search engine keeps growing every year and keeps improving its technology. If Google addresses its weaknesses and threats, no other competitor can outperform or match this company.
FAQs
Who created Google?
Google was created by Larry Page and Sergey Brin.
Who is Google CEO?
The CEO of Google is Sundar Pichai.
What is Larry Page’s net worth?
Larry Page’s current net worth as estimated by Forbes in April 2022 is $111 bn.
What is Sergey Brin’s net worth?
The net worth of Sergey Brin is $107 bn.
What is Google known for?
Google is a multinational conglomerate that is known for the creation of the world’s most popular search engine platform.
What year was Google founded?
Google was founded in 1998, on the 4th of September.
Coronavirus is here, and it’s making a big impact on every aspect of business. From trade market swings to airline collapses, the economy of many industries is taking its toll and having major constraints. Whole worldwide especially in Europe, those living in Italy, Spain, Germany and France have been the most impacted so far and the situation is set to worsen. The indirect effects for startups have also been huge, but some businesses are faring better than others. While many struggle to operate amid travel turmoil, others are cashing in on the health crisis by supplying much-needed medical solutions. Some London founders even launched an entirely new startup (called Epiderm) this year to help track employee and visitor contact through check-ins and calendar analysis. Similarly, there are clearly dozens of sectors that will likely be impacted such as dating apps, concert booking apps, edtech, will-writing startups, fitness apps, remote working tools and recruiting startups and so on.Here we discussed about impact of Coronavirus on Fintech Startups.
What about the sector of fintech?
Like everything else, it’s also likely to be under threat. There’s more to come from COVID-19 in the coming weeks where large and small fintech companies take a hit. Some could even benefit. Fintech firms globally also have already benefited from more flexible regulations in both emerging and mature countries as many efforts are being made to improve financial inclusion and serve a broader digital economy. According to a report from Ecosystem, there were five key trends that were expected to shape the Fintech market during 2020. The coronavirus pandemic could be devastating for many companies, but it’s also shining a spotlight on the power of fintechs across the world. They seem to be responding to the sudden challenge effectively, though uncertainties lie ahead.
Negative Impacts of Consumer Spending
Fear, panic, and quarantine measure heavily impact consumer spending. Canceled flights, closed stores, and social distancing have resulted into a drop in transaction volume at all levels of the economy. This means FinTech firms in the payments sector like Paypal, PhonePe, Google Pay, Stripe, or Chime will collect fewer fees, negatively impacting their profitability and valuations. Hardware shortages could also impact firms like Square, that rely on digital devices to support transaction processing. It’s evident that large businesses are already feeling the heat with the coronavirus outbreak. Companies such as Mastercard and Visa have cut their predictions for revenue due to the scare. This is because many users of credit cards are unlikely to use it to purchase flights, which is one of the more common transactions for credit card use.
The impact of the coronavirus outbreak is impacting both financial markets and consumer behavior as never before. At least in the short term, there has been a significant flight to safer investments by consumers, which could negatively impact venture capital funding of existing and new fintech firms. Combined with investors concerned with higher funding costs, the volatile market could be a catalyst for lower valuations. This potential drying up of financing to non-traditional financial services firms could force many firms to find collaboration or investment partners from traditional banking organizations. Some early-stage fintech firms may need to shut down.
Chinese fintechs will likely face the worst negative impact from the virus. Funding for Chinese fintechs was already down in 2019, likely due in part to trade tensions between the US and China. In 2019, fintechs only secured $298 million, down from $1.8 billion during the same time the year before. Having originated in Wuhan, China, the coronavirus is making the country’s economic outlook particularly uncertain, and more investors may shy away from the market as a result. That means Chinese fintechs might need to prepare for an even less funding-friendly environment in 2020 and shift their focus to a sustainable business model.
Positive Impacts
Whilst we’ve seen many negative impacts recorded in the fintech sector, there is a bright side in which some companies benefiting from. It’s encouraged many companies to adopt fintech for the purpose of their business. For example, the Banking and Insurance Regulatory Commissions company Ye Yanfei explained that blockchain is being utilised for medical data verification. Similarly, consumers desire for digital banking services will most likely increase, forcing many traditional financial institutions to fast-track digital innovation efforts. As a result, many legacy banks and credit unions may look to fintech firms or startups for assistance in bringing better digital banking solutions to the marketplace during this crisis. This increase in demand for digital solutions could provide a lifeline to fintech firms at a time when VC funding may not be an option.
In addition, weakening economies may force government organizations and regulators to stimulate the expansion of fintech solutions. For instance, South Korea is planning to temporarily ease regulations on fintech and ten other industries in March, in an attempt to jumpstart its economy amid the coronavirus outbreak. The World Health Organization has also encouraged contactless payments to contain the spread of COVID-19. Moreover, Google Trends shows a significant spike in the search requests regarding online loans which is a good news for many fintech firms.
Governments are appealing for Cashless Payment
Many countries are also encouraging the use of contactless payment to prevent the spreading of the virus any further from the exchanging of money. To ensure safety of citizens amid the coronavirus outbreak, the Reserve Bank of India (RBI) governor, Shaktikanta Das, asked customers to use digital banking facilities as far as possible. Das added, “In the context of COVID 19, RBI and the government together are giving emphasis on encouraging digital payments. And over a period of time, various measures have already been taken to establish safe, secure, stable and affordable retail payment system such as the National Electronic Fund Transfer (NEFT) and the Immediate Payment Service (IMPS).” In South Korea, where regulations were once considered rather strict in the fintech domain, they’re now willing to ease the regulations that they have. This is to lessen the impact of the virus spreading and having a larger impact on the economy.
Reserve Bank of India(RBI) has appealed people to use Contactless Payment
It could boost demand for certain insurance types. The virus’ dominance in headlines may increase awareness of insurance and boost demand for health and life coverage, as well as business interruption and event cancellation coverage. For instance, the outbreak has led to many conferences and events being cancelled at the last minute. At the same time, insurers are not supposed to pay over claims of this outbreak. Most travel insurers, for example, exclude pandemic, epidemic disease or infectious diseases from their coverages, meaning that likely only few will be affected by the virus. A report has revealed India has shown a moderate increase of 7 % when it comes to availing online financial services during this period of social distancing.
21-day Lockdown to promote Digital Payment
India is currently going through a 21-day lockdown that was imposed by Narendra Modi-led central government, as part of its plan to battle the novel coronavirus COVID-19. Several prominent names in the Indian startup ecosystem have also been promoting digital payments. There are various digital payment channels people can use instead of transacting via cash. Digital payments channels include NEFT, IMPS, UPI, etc. Razorpay’s report highlighted that UPI, internet banking and wallet payments have all grown in India because of quarantine and social distancing. Surprisingly, Delhi and Bengaluru have noted a decline in digital payment but this is just a matter of time. Soon, digital payment will see a boom across all cities due to lockdown. So, this is a good opportunity for all fintech firms and startups to flourish.
Nadeesh Kareemdathil
