Google Tez Payment App’s Cashbacks, Rewards, and the Growth in India

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When Google Tez Entered in Market Everyone Know that one day Google Tez App Will Use As Mazor Payment App In India. Tez, Google’s payments app for India that’s built on top of the country’s Unified Payments Interface (UPI), was launched in September last year. By early December – a little less than three months after the launch – the app had clocked 12 million users and 140 million transactions.

Cashbacks, Rewards, and the Growth of Google Tez Payment App in India

However, although there’s very little data that’s publicly available, the feeling among many is that Tez’s numbers are made possible thanks to a very generous cashback policy. Pay someone using Tez, and you win something that the company calls a “scratch card”. These virtual tokens can be checked like lottery cards, and you stand to make a decent amount of money on each scratch card. There are limits in place – on how many scratch cards you’ll receive, and there’s a chance that you’ll get nothing for the transaction – but this isn’t necessarily a disincentive.

To see why, you can take a look at the world of video game design. A relatively recent phenomenon there is “loot boxes”, where you get a reward, but you don’t know what’s inside. As it turns out, this taps into the same kind of addictive psychology as gambling – although you might see “better luck next time” more often than not, if you hear about the top tier rewards often enough, that’s enough to keep you hooked.

This is something that you see even in the Google Play reviews for the Tez app – a significant number are just about the rewards, with one particularly frustrated user commenting, “This app should be named as better luck next time,” although he did rate it four stars, so perhaps the experience wasn’t that bad overall?

tez google official

One former Google employee, who now works for a competitor and requested not to be named, told us that she and all of her colleagues have switched to Tez for from Paytm, the biggest mobile wallet operator in India that has raised funds from Alibaba and Softbank, among others .

“Earlier we used to send money via Paytm, you know, for things like someone ordered lunch and you want to pay your share, or you want to contribute to a birthday present kind of thing,” she explained. “So earlier we all just used Paytm because we anyway had money in that for Uber right? But with Tez you know you get the rewards and it’s also a really well made app so it’s easy to use.”

This was a common sentiment amongst all the people we spoke to about Tez; the design and ease of use were often mentioned, but not nearly as often as rewards and cash backs. It’s no surprise though that Google downplays the role these incentives have played in Tez’s phenomenal growth in India.

“Instant cash back for referral is a one-time token amount for a successful installation and transaction,” the company stated. “Once installed people go on to use Tez to pay for variety of use cases. The UPI merchant base had been growing steadily in India, and there are more than 525,000-plus merchants on Tez. They’re using it to take payments.”

Analysts, however, agree with the popular sentiment. “There are no specific numbers as RBI doesn’t provide a breakup by the sources, but going by the secondary domain, Google Tez has 12 million users,” says Hanish Bhatia, Senior Analyst with Counterpoint Research. “Our data on this is very qualitative, but it [rewards] played a significant role in the growth. Cash back as well as the other offering [referrals]. For many people it is the primary reason for getting the app.”

However, he also agrees with Google’s assessment that people do keep using the app afterwards.

“One thing that we have observed [through interviews] is that the value of transactions on Google Tez is comparatively high. Typically the average is something like $5 [roughly Rs. 320], but it appears higher for Tez.”

Google refused to reveal the amount of money it has spent on cash backs and other incentives in promoting Tez usage. “We do not share details of our marketing and promotional budgets,” the company said.

Paytm, which recently added UPI support to its app, also clocked some impressive numbers in the first month, backed by incentives of its own. Competitors claim that Paytm’s numbers are also almost entirely driven by cashback incentives, rather than real usage, though both Google and Paytm have clarified that they do not count the cashbacks themselves as transactions.

In the two months before Paytm added UPI support to its app in December last year, Google’s Tez accounted for 70 percent of transactions on the BHIM UPI platform. Whether it can sustain this kind of growth in the face of increased competition remains to be seen

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