By Newley Purnell 

NEW DELHI -- Alphabet Inc.'s Google is raising its mobile-payments game in India with new functions and services as global players race to woo the nation's legions of consumers who are skipping credit cards and transacting on smartphones instead.

A day after Warren Buffett's Berkshire Hathaway Inc. said it had invested in the parent company of India's largest digital-payments firm, called Paytm, Google said it is expanding its mobile money service in the South Asian nation. It is partnering with several local banks to offer consumer loans from within its app in the coming weeks, aiming to assist users seeking cash to cover expenses such as school fees.

Google is also expanding its tie-ups to more online merchants as well as to physical retail shops such as India's ubiquitous mom and pop stores.

Google's app, which launched in September 2017, is the search titan's first such service permitting users to transfer money electronically to individuals and businesses in the country without the use of a credit or a debit card. It resembles a simple chat app and functions in several Indian languages.

"India's witnessing an amazing transformation," Caesar Sengupta, Google's vice president for its Next Billion Users initiative and payments, said Tuesday in New Delhi. Internet access is expanding and masses of people are getting hooked up to the web for the first time, he said.

Google's payments app has been been downloaded more than 55 million times and has facilitated more than 750 million transactions valued at an annualized rate of $30 billion per year, Mr. Sengupta said.

While the app was originally called Tez, which means "fast" in Hindi, Google says it is renaming it Google Pay with an eye on expanding into other countries. "The future of the internet is reflected right here in India," said Mr. Sengupta.

Mr. Buffett's Omaha, Neb., conglomerate said Monday it had invested in Paytm parent company One97 Communications Ltd., which has more than 300 million users. The app from Paytm, of Noida, India, lets consumers pay for everything from auto-rickshaw rides to utility bills, transfer money to others, and even buy portions of gold bars, a common method of saving in India.

The deal's value was 20 billion to 25 billion rupees ($286 million to $358 million), according to a person familiar with the matter. Berkshire portfolio manager Todd Combs, a trusted Buffett lieutenant, is joining Paytm's board of directors, Paytm said Tuesday.

Mr. Combs didn't immediately respond to an email seeking comment about his board appointment.

"The payment ecosystem in India is growing so dynamically," Patym Founder and Chief Executive Vijay Shekhar Sharma said in an interview Tuesday. He said he had traveled in February to meet Mr. Combs in Omaha, where the two talked about business and technology.

"Todd is an incredibly experienced payments and financial-services industry person," Mr. Sharma said. "He will bring us a unique perspective from a global background."

Paytm and Google are but two of several players vying for India's consumers. Facebook Inc.'s WhatsApp, which has some 200 million users in India, is testing a mobile-payments feature and hopes to roll it out across the country. Amazon.com Inc., which is spending $5 billion to expand its operations here, has a digital-payments feature called Amazon Pay.

Meanwhile, Indian policy makers have been considering ways to reduce fast-expanding American tech behemoths' power in India, with the fate of the world's biggest still-open internet economy at stake.

"It is too early to say which app will win this space, said Neha Dharia, a Bangalore-based analyst with research firm Warp Speed Reads. "They are all clamoring for user numbers and transaction volume." Key to victory, she said, is having a diverse portfolio of services and being able to negotiate the "fast-evolving regulatory landscape."

--Corinne Abrams and Nicole Friedman contributed to this article.

Write to Newley Purnell at newley.purnell @wsj.com

 

(END) Dow Jones Newswires

August 28, 2018 11:26 ET (15:26 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.
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