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

Google is increasing its push into shopper finance in India with the launch of a UPI-linked bank card, betting on a rustic of greater than 1.4 billion individuals the place fewer than 50 million at the moment maintain a bank card.

On Wednesday, Google entered India’s rising co-branded bank card market with the launch of Flex by Google Pay, partnering with personal lender Axis Financial institution to increase entry to credit score within the nation’s UPI-driven funds ecosystem.

India’s speedy adoption of digital funds by the government-backed Unified Funds Interface (UPI) has remodeled how shoppers pay however has not translated into broad entry to credit score. That hole has created a chance for know-how corporations and banks to embed lending into extensively used funds apps, serving to clarify Google’s transfer into the house.

Flex by Google Pay is issued digitally by the Google Pay app and can be utilized each on-line and at bodily retailers, the corporate mentioned. Constructed on the Indian government-backed RuPay community, the cardboard features a rewards programme that credit digital “Stars” on transactions, with every Star price ₹1. Customers can monitor spending and payments inside the app, select to repay balances in full or convert them into installments, and handle safety settings corresponding to blocking the cardboard or resetting a PIN.

The launch builds on Google Pay’s broader effort to increase entry to credit score in India, the place it has already partnered with banks and non-bank lenders to offer personal and gold-backed loans by the app. As one of many nation’s most widely used UPI platforms, Google Pay affords Axis Financial institution entry to a big, digitally lively consumer base at a time when lenders are more and more trying to scale credit score distribution by know-how platforms slightly than bodily branches.

Whereas Google has began with Axis Financial institution, it goals so as to add extra issuer companions quickly to increase its co-branded bank card providing in India.

Pricing on the cardboard, together with curiosity and relevant expenses, will differ by consumer and credit score profile, with no utility payment, Google mentioned, including that expenses linked to compensation selections are proven upfront within the app. Processing charges apply to EMI conversions, and late cost expenses can be levied in keeping with the issuing financial institution’s coverage.

India’s bank card market has been increasing quickly lately. The variety of excellent playing cards has grown at an annual fee of about 14% over the previous three years to round 110 million, whereas transaction volumes and values have risen at near 30%, per a current PwC report (PDF). Common annual spending per card has elevated from about ₹132,000 (round $1,450) to roughly ₹192,000 (about $2,100), suggesting playing cards are getting used extra often for routine funds slightly than occasional big-ticket purchases.

Regardless of development within the variety of excellent playing cards and bank card spending in India, the growth has largely been pushed by current customers slightly than a significant improve within the variety of cardholders. Google goals to assist handle that hole by bringing new customers into the credit score system, significantly these cautious of conventional card compensation buildings. “It’s the identical customers getting an increasing number of credit score,” mentioned Sharath Bulusu, senior director of product administration for Google Pay, including that versatile compensation choices are designed to ease considerations round unpredictable billing for first-time credit score customers.

“We predict we now perceive the issue, the house and the consumer nicely sufficient to unravel one thing uniquely for them,” Bulusu advised TechCrunch, explaining Google’s timing.

Google’s transfer comes amid rising competitors in India’s co-branded bank card market, the place corporations together with Amazon, in addition to Walmart-owned Flipkart and PhonePe, already provide related merchandise. Shopper web platforms corresponding to meals supply companies Swiggy and Zomato, together with on-line journey corporations together with MakeMyTrip and Yatra, have additionally entered the house in partnership with banks.

Co-branded bank cards accounted for about 12–15% of India’s whole bank cards within the monetary 12 months ended 2024 and are projected to seize greater than 1 / 4 of the market by quantity by 2028, rising at an annual fee of 35–40%, in response to a report (PDF) by consultancy agency Redseer.

Alongside the co-branded card launch, Google can be rolling out “Pocket Cash,” a function within the Google Pay app that lets mother and father give kids restricted entry to digital funds. Constructed on the lately launched UPI Circle performance, the function lets mother and father set a month-to-month spending cap of as much as ₹15,000 or approve particular person transactions initiated by the kid.

Dad and mom obtain notifications for every transaction and may view spending historical past or pause entry to the function by their very own Google Pay app, the corporate mentioned. The transfer may additionally assist Google broaden Google Pay’s utilization and addressable market in India, the place it competes closely with Walmart-backed PhonePe among the many nation’s main UPI platforms.

Google’s Pocket Cash function follows earlier efforts by Indian fintechs corresponding to FamPay and Junio, which sought to allow kids’s digital spending by pay as you go playing cards. Nonetheless, not like pay as you go devices, Google makes use of the UPI Circle framework to let mother and father retain management of funds till the second a transaction is made, slightly than loading cash upfront.

“With UPI Circle, the cash stays within the guardian’s account till it’s spent,” Bulusu mentioned, including that the method makes it simpler for households already snug utilizing Google Pay to introduce kids to digital funds. He mentioned the function displays a broader guess on acquainted funds apps as a strategy to construct monetary confidence amongst youthful customers as digital funds grow to be extra pervasive.

Google can be upgrading the expertise for small companies on Google Pay, permitting prospects to fee retailers immediately after a transaction, with these critiques syncing to the service provider’s Google Maps itemizing. The corporate can be rolling out an AI-powered promoting function inside the Google Pay for Enterprise app that assists retailers in creating and launching advertisements.

Greater than 530 million distinctive customers have made not less than one cost by Google Pay, whereas over 23 million small retailers have been onboarded to the platform over time, Bulusu mentioned. That attain, he added, offers the corporate confidence it could actually introduce new monetary merchandise to customers already snug transacting digitally.