The legions of India’s kirana stores – small, neighbourhood shops – are Google Pay’s latest strategy for growth.

The small stores are estimated to make up around 90% of the country’s FMCG grocery sales, and have long attracted attention from brands looking for ways to introduce payment technology.

The increased penetration of smartphones among consumers, and a general trend away from physical money in the country, has already been responsible for widespread use of cards and online means of payments in stores. Some local stores are now also operating app-based home deliveries.

Now Google is trialling purchases in kirana based on the Unified Payments Interface (UPI), the Economic Times reports.

“It will bring the convenience of card payments onto the smart phone,” one payment executive told the ET.

“The only thing required here will be, instead of the card swipe, customers will have to share the mobile number at the billing counter.”

Customers will receive a request to “collect” on their Google Pay app and then make the payment by tapping in the UPI code.

Google has already found success with UPI, mainly through P2P and bill payments, the ET says. 

For Google, which is aiming to connect with the next billion users of the Internet, bringing its technology to kirana stores represents a key sector of the country’s huge market. As the ET puts it, by leveraging payments, the “company is targeting a big chunk of the consumer-retail interface”.

“There are small-scale pilots that are being run across retail stores in the country,” an executive close to the tests told ET. “As of now there are no banner advertisements that are being done, only early adopters can test the product. The rollout will happen over the next few months.”

Google will also run localised promotional campaigns in the areas where trials are held, it’s understood.

“They have geo-tagged shops and can easily identify consumers in the surrounding area as well, thereby offering targeted marketing campaigns,” the insider told the ET.

Google’s plans are thought to be similar to PhonePe’s strategy, which is deploying MapMyIndia to pinpoint offline stores and promote UPI payments.

The average kirana shopkeeper has previously been less than ready to embrace cashless payments, but Paytm, India’s leading digital wallet, made serious inroads on changing attitudes with a major ad campaign in 2016. The TV campaign stressed kiranas could build customer retention and create loyalty through contactless. And it worked. The number of local shopkeepers using Paytm’s services went from 50,000 to 1.3 million.

Sourced from the Economic Times, Google, WARC