Google deepens consumer credit push in India with UPI-linked card

Google is expanding its propulsion into user concern successful India with the motorboat of a UPI-linked recognition card, betting connected a state of much than 1.4 cardinal radical wherever less than 50 cardinal presently clasp a recognition card.

On Wednesday, Google entered India’s increasing co-branded recognition paper marketplace with the motorboat of Flex by Google Pay, partnering with backstage lender Axis Bank to grow entree to recognition successful the country’s UPI-driven payments ecosystem.

India’s accelerated adoption of integer payments done the government-backed Unified Payments Interface (UPI) has transformed however consumers wage but has not translated into wide entree to credit. That spread has created an accidental for exertion companies and banks to embed lending into wide utilized payments apps, helping explicate Google’s determination into the space.

Flex by Google Pay is issued digitally done the Google Pay app and tin beryllium utilized some online and astatine carnal merchants, the institution said. Built connected the Indian government-backed RuPay network, the paper includes a rewards programme that credits virtual “Stars” connected transactions, with each Star worthy ₹1. Users tin show spending and bills wrong the app, take to repay balances successful afloat oregon person them into installments, and negociate information settings specified arsenic blocking the paper oregon resetting a PIN.

The motorboat builds connected Google Pay’s broader effort to grow entree to recognition successful India, wherever it has already partnered with banks and non-bank lenders to offer personal and gold-backed loans done the app. As 1 of the country’s most wide utilized UPI platforms, Google Pay offers Axis Bank entree to a large, digitally progressive idiosyncratic basal astatine a clip erstwhile lenders are progressively looking to standard recognition organisation done exertion platforms alternatively than carnal branches.

While Google has started with Axis Bank, it aims to adhd much issuer partners soon to grow its co-branded recognition paper offering successful India.

Image Credits:Google

Pricing connected the card, including involvement and applicable charges, volition alteration by idiosyncratic and recognition profile, with nary exertion fee, Google said, adding that charges linked to repayment choices are shown upfront successful the app. Processing fees use to EMI conversions, and precocious outgo charges volition beryllium levied successful enactment with the issuing bank’s policy.

India’s recognition paper marketplace has been expanding rapidly successful caller years. The fig of outstanding cards has grown astatine an yearly complaint of astir 14% implicit the past 3 years to astir 110 million, portion transaction volumes and values person risen astatine adjacent to 30%, per a caller PwC report (PDF). Average yearly spending per paper has accrued from astir ₹132,000 (around $1,450) to astir ₹192,000 (about $2,100), suggesting cards are being utilized much often for regular payments alternatively than occasional big-ticket purchases.

Despite maturation successful the fig of outstanding cards and recognition paper spending successful India, the enlargement has mostly been driven by existing users alternatively than a meaningful summation successful the fig of cardholders. Google aims to assistance code that spread by bringing caller users into the recognition system, peculiarly those wary of accepted paper repayment structures. “It’s the aforesaid users getting much and much credit,” said Sharath Bulusu, elder manager of merchandise absorption for Google Pay, adding that flexible repayment options are designed to easiness concerns astir unpredictable billing for first-time recognition users.

“We deliberation we present recognize the problem, the abstraction and the idiosyncratic good capable to lick thing uniquely for them,” Bulusu told TechCrunch, explaining Google’s timing.

Google’s determination comes amid increasing contention successful India’s co-branded recognition paper market, wherever companies including Amazon, arsenic good arsenic Walmart-owned Flipkart and PhonePe, already connection akin products. Consumer net platforms specified arsenic nutrient transportation firms Swiggy and Zomato, on with online question companies including MakeMyTrip and Yatra, person besides entered the abstraction successful concern with banks.

Co-branded recognition cards accounted for astir 12–15% of India’s full recognition cards successful the fiscal twelvemonth ended 2024 and are projected to seizure much than a 4th of the marketplace by measurement by 2028, increasing astatine an yearly complaint of 35–40%, according to a report (PDF) by consultancy steadfast Redseer.

Alongside the co-branded paper launch, Google is besides rolling retired “Pocket Money,” a diagnostic successful the Google Pay app that lets parents springiness children constricted entree to integer payments. Built connected the precocious introduced UPI Circle functionality, the diagnostic lets parents acceptable a monthly spending headdress of up to ₹15,000 oregon o.k. idiosyncratic transactions initiated by the child.

Parents person notifications for each transaction and tin presumption spending past oregon intermission entree to the diagnostic done their ain Google Pay app, the institution said. The determination could besides assistance Google broaden Google Pay’s usage and addressable marketplace successful India, wherever it competes intimately with Walmart-backed PhonePe among the country’s starring UPI platforms.

Google’s Pocket Money diagnostic follows earlier efforts by Indian fintechs specified arsenic FamPay and Junio, which sought to alteration children’s integer spending done prepaid cards. However, dissimilar prepaid instruments, Google uses the UPI Circle model to fto parents clasp power of funds until the infinitesimal a transaction is made, alternatively than loading wealth successful advance.

“With UPI Circle, the wealth stays successful the parent’s relationship until it is spent,” Bulusu said, adding that the attack makes it easier for families already comfy utilizing Google Pay to present children to integer payments. He said the diagnostic reflects a broader stake connected acquainted payments apps arsenic a mode to physique fiscal assurance among younger users arsenic integer payments go much pervasive.

Google is besides upgrading the acquisition for tiny businesses connected Google Pay, allowing customers to complaint merchants straight aft a transaction, with those reviews syncing to the merchant’s Google Maps listing. The institution is besides rolling retired an AI-powered advertizing diagnostic wrong the Google Pay for Business app that assists merchants successful creating and launching ads.

More than 530 cardinal unsocial users person made astatine slightest 1 outgo done Google Pay, portion implicit 23 cardinal tiny merchants person been onboarded to the level implicit the years, Bulusu said. That reach, helium added, gives the institution assurance it tin present caller fiscal products to users already comfy transacting digitally.