Update: One point that Anivar Aravind had pointed out in his tweets was Google’s terms and conditions for Tez, which appears to allow anyone to add Aadhaar numbers of others in their Tez account. When asked about this at the press conference today, Google said that (and we quote with slight paraphrasing):
“There’s a feature called Pay by Aadhaar on UPI and it’s an optional feature. There is a lack of regulatory and legal clarity on how to use Aadhaar. Right now there’s no pay by Aadhaar on UPI. We are working with regulatory authorities, our legal team and the NPCI to understand how it works. We added it to our ToS (Terms of Service), because we felt that there was a possibility (of rolling it out in the future), and that some of you can read it (in the terms and conditions). Any new feature coming in, users will be notified about it.”
Update: Anivar Aravind, founder of the Indic Project and a FOSS contributor is looking at the terms and conditions for Tez. Here’s what we know now.
- Tez’s usage will be limited to India and will require users to have an Indian bank account and Indian phone number. Users will have to be physically present in India for the service.
- Google may charge users for UPI transactions. The terms and conditions mention that Google will inform users of any fees and Google will have the right to choose the fees. Note that HDFC Bank started charging customers for outward UPI transactions in June, however the bank said it is likely to roll back the charges. When the UPI was launched, the NPCI said that person-to-person payments would be free, while for person-to-merchant transactions banks could charge merchants an interchange fee similar to the MDR. But this doesn’t seem to be the case now. Banks are now allowed to charge customers at their discretion for the UPI, according to Dilip Asbe, chief operating officer at NPCI.
Update: Note some users on Twitter are pointing out that Tez will not work on rooted mobile phones.
— surinderxx (@surinderxx) September 18, 2017
Also, it is unclear if Tez has a wallet licence from the Reserve Bank of India (RBI), but if it does, it will have repercussions as the RBI’s proposed guidelines say that wallets cannot be allowed on rooted phones. PhonePe, another payments application which uses the UPI, does have a wallet licence from the RBI. Is anybody having any issues with PhonePe on a rooted device? Let us know?
Earlier: Google’s new payments app, Tez, can use audio for proximity-based person-to-person money transfer and is available in seven Indic languages: Hindi, Bengali, Gujarati, Kannada, Marathi, Tamil and Telugu.
While the company is launching the app at a press conference in Delhi today, it is already live on the Google Play Store, and fully functional. Download it here.
Oddly enough, at the time of writing this post, the app ranks as #3 for a search for Google Tez…the irony of Google Tez needing to work its Play Store – “SEO”.
Audio-based P2P money transfer
Google Tez uses UPI, the Unified Payments Interface for payments, which is a protocol that allows the transfer of money from one bank account to another. Apart from allowing transfer of money from UPI ID to UPI ID, account number and QR code, UPI also allows payments by connecting devices using audio.
This interface reminds us of Shareit, which has proximity based file transfer.
However, for allowing payment, both entities not only have to be on UPI, but they also have to have integrated their accounts to this particular UPI app.
I tried and it worked, but with glitches: initially, while adding the bank account, the server kept timing out and the banks weren’t being listed. That may have been a UPI problem, not a Google problem. It took a few attempts, despite trying multiple connections (WiFi, data, tethering from another connection), and just as I was about to give up, it worked on another phone (that’s why you can see screenshots above from two different phones). Teething troubles.
Also, there’s something strange going on. UPI uses virtual payment addresses (VPAs), which help separate the bank account from the identification number: it’s like having an easy to remember email address, instead of a complex number for each account.
Now the only UPI service I’ve used is PhonePe, and my account is nixxin@yesbank (because PhonePe uses Yes Bank). However, the Google Tez app automatically picked up nixxin@okicici as the VPA. I haven’t created an ICICI VPA, so it’s probable that ICICI created one for me without my consent, and that’s not Google’s fault. However, why is Google Tez (or UPI) giving me only one option for a VPA, when I have two? If the only acceptable VPA for a UPI account is the one that’s linked to the bank, then what’s the point of a VPA, and doesn’t that defeat the idea of a VPA being the unbundling of payments from the account? What is going on with UPI?
Shashi adds: Note that Samsung Pay, despite being powered by Axis Bank, has its own UPI handle called @pingpay.
The draft paper for the UPI said that it was technically possible to create a financial address. So it should be possible for Google to create a financial address such as @tez. As Nikhil had pointed out, this will have implications for banks and a customer’s identity. What the UPI essentially does is that it uses a unique identity outside of a bank account number, and unbundles identity from an account. This will enable transferring money from identity to identity, and that is linked on the back-end to an account. In future, that account could be held by a bank, a Payments Bank or a wallet: it’s almost irrelevant, as to where the money is stored.
Google is going the cashback route for getting people on:
- Inviting: they’re giving Rs 51 to users when their invited friends make a payment. This is valid till April 1st 2018, and comes with a limit of Rs 9000 per year.
- A scratch card option if you pay anyone Rs 50 or more this week, with a chance to win Rs 1 lakh. This is applicable only to payments to other Tez users, and there’s only one reward per week. The next draw is on 24th September 2017.
- On payment of Rs 50 or more, each side gets a scratch card which can earn them up to Rs 1000 (up to 10 cards per week). This has a limit of Rs 9000 per financial year.
Security is a major concern in financial payments, and Google Tez allows the usage of a screen lock or a Google PIN to use the app. Note that UPI also has its own PIN number.
We’ll have more from Google’s press conference today, and an analysis of Google’s choices with Tez to follow.