Google has entered the massive remittances market.
Google Pay, the tech giant's mobile payments service revealed Tuesday that users in the United States can now transfer money to India and Singapore.
The company has collaborated on the feature with money transfer companies Wise and Western Union, integrating their platforms into the Google Pay app. Users can send money abroad using either Wise or Western Union. Google will take a small commission on cross-border transactions made via its app.
Last year, Google Pay updated its app in the United States, signalling a foray into banking services with the inclusion of checking accounts from lenders such as Citi, as well as incentives and budgeting insights.
Many major tech companies are moving deeper into the financial world, like Google. In 2019, Apple partnered with Goldman Sachs to introduce its own credit card. In a variety of ways, Facebook is experimenting with digital currencies and payments. Ant Financial, a subsidiary of Alibaba, and Tencent, a subsidiary of Tencent, have emerged as formidable players in the digital payments space in China.
Nonetheless, these Big Tech firms seem to have no plans to become banks.
In an interview with CNBC, Josh Woodward, Google Pay's director of product management, said, "We're not planning to become a bank or a remittance provider." “To create these products, we work with the environment that already exists.”
Google's new foray into financial services will see the company join the massive remittances sector. Remittances into low- and middle-income countries are expected to be worth $508 billion in 2020, according to the World Bank. This is down 7% from 2019, which the bank attributes to the effect of the Covid pandemic on migration.
Wise has scored a significant victory as a result of the news. The London-based fintech firm, formerly known as TransferWise, is increasingly selling its platform as a service to banks such as Groupe BPCE in France, Monzo in the United Kingdom, and N26 in Germany. Western Union's digital strategy has recently been bolstered in order to compete with newcomers such as Wise and WorldRemit.
Google intends to expand its remittances feature into the 80 countries where Wise operates and, eventually, the 200 countries where Western Union operates.
Here's how the GPay feature will work:
To send money internationally, users must first find the Google Pay user to whom they want to send money.
When they locate the contact, they must tap on Pay.
Google Pay will present you with the option of using Western Union or Wise. Following that, users must follow the steps to complete the payment.
Google also mentions in its blog post that until June 16, Western Union will offer unlimited free transfers when sending money with Google Pay. Wise will cover the cost of the first transfer for new customers on transfers up to $500.