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Google searches for a space in wealth management

Mar 28, 2019 by The Passage Team
Google searches for a space in wealth management

Google is all set to foray into wealth management a year and a half after the US tech giant launched its Unified Payment Interface (UPI)-based payments app in India.

Earlier this week, the California-headquartered company piloted a digital gold purchase service on Google Pay, a Mint report said. Google is also looking to launch other wealth management products, including mutual funds, going forward, the report added.

“Google’s biggest focus this year is to further establish its payments platform Google Pay," the report stated, citing a source. “The company is adding more use cases to the platform and is tinkering with the idea of adding mutual funds, insurance, etc."

Google’s homegrown rivals, Paytm and PhonePe already offer digital gold purchase. Mobikwik too has a similar offering.

Paytm incorporated a separate subsidiary, Paytm Money, in January 2018, to become a full stack financial services company. Later in October, Mobikwik acquired (its first) Mumbai-based online mutual fund investment platform Clearfunds. Around the same time, PhonePe incorporated a subsidiary to offer wealth management services. While Paytm and Mobikwik already offer a bouquet of financial and wealth-management services, PhonePe will be rolling out similar services over the next 12 months. Truecaller, which bought out payment company Chillr in June 2018, is already beta testing in wealth management space.

Google claims to have 45 million monthly active users for its payments app with an annualised run rate of USD 81 billion, based on the transaction value over the last few weeks.

Initially, Google Pay targeted peer-to-peer (P2P) UPI transactions by offering aggressive cashbacks. Soon the payments space became ultra-competitive with Paytm and PhonePe vying for India’s over 400 million smartphone users. However, these P2P transactions barely earn any money for the companies. Payments firms are thus eying Indian merchants aggressively in the hopes of developing a sustainable business model.

Google Pay claims to have listed 2,000 online merchants including Uber, Swiggy, Zomato, BookMyShow, Dunzo and MakeMyTrip on its platform - a minuscule share, when compared to Paytm’s almost 9.5-million and PhonePe’s 3-million-strong merchant base (as claimed by the companies, according to various media reports).

Earlier this week, Google Pay forged a partnership with Pine Labs and Innoviti, which provide point-of-sale solutions, to establish a network of 200,000 stores across 3,500 towns and cities in India over the next few months. The rollout, the company said, will begin with grocery chains Reliance Fresh and Vishal Mega Mart.

The Passage Team

The Passage is committed to creating in-depth content over technology industry across Asia with a focus on emerging startups in the technology, healthcare, education, food, tech, travel & mobility segments.

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