Google wants a larger share of India’s digital payments, and isn’t resting on continued domination of Google Pay as one of the dominant UPI, or unified payments interface, players. The tech giant’s foray into the co-branded credit card space, with the Google Pay Flex Axis Bank Credit Card, underlines what has been a rather interesting year for India’s co-branded credit card space as banks and financial platforms attempt to reach new users. Sharath Bulusu, Senior Director – Product Management for Google Pay, tells HT in a conversation re-emphasises this is part of Google’s long-standing mission to “make credit simple and accessible for everyone” in India. Numbers substantiate Google’s approach has worked, thus far. The new Google Pay Flex credit card, issued with Axis Bank for now, is virtual and built on the RuPay network, with no annual or renewal fee. But that isn’t the only new addition to Google Pay.
Bulusu believes in an African proverb “If you want to go fast, go alone. If you want to go far, go together” applies very well to India’s credit evolution, which still remains massively underserved. “If we want to be successful in growing the economy, we will have to solve that problem. No single player will solve it because nobody’s got a balance sheet big enough to serve the credit needs of India. Not even the biggest bank in the country has that. It is going to require bringing a lot of players,” he says. “And the other reason why we think we can do this well is because over the years we’ve shown that we can partner well with an ecosystem that historically was not our thing,” he adds, recalling the journey that began many years ago with the Tez app.
Broad approach: Credit cards, parental controls and more
Google is extending the scope of the UPI Circle feature, that allows for the addition of friends and family as secondary users for making UPI payments without needing their own bank accounts, and was added for users in India a year ago. The addition of the Pocket Money feature will allow parents to enable access to digital payments for their children, but with a layer of supervision. There are two ways parents can set this up — either with explicit approval required for every transaction initiated by their child to complete the payment, or set a monthly limit of up to ₹15,000 that allows the child to spend and manage money independently. In the latter, parents will still receive a notification when a transition is made, and all transactions will be trackable in the Google Pay app.
There is further extension of availability of credit for users, with Google onboarding IDFC First Bank, L&T Finance, PayU Finance, and SMFG India Credit as lending partners on the Pay app. Bulusu insists having more partners allows them to reach out to a broader demographic of users because each tends to have their areas of strength. “Democratising credit requires more than just access, it requires strengthening the complete credit ecosystem,” he insists. Google’s data indicates that only one among every 5 Indians eligible for credit, actually get access to formal credit due to various reasons — location, amount of credit and so on.
Google is also adding new functionality for small businesses on Google Pay, including prompting users or customers for ratings after a transaction is successfully completed — this Bulusu believes will strengthen the reviews for any business across Google’s products including Search and Maps listings, and separate the bad actors from genuine customers. There is also the extension of simplified ads, with businesses able to use generative AI to create their own ad.
In terms of safety for users, Google has over the past few months added warnings for users on Android 11 and above, when they attempt to open Google Pay when a screen sharing app is open on their phone — this is a common method used by scammers, to trap unsuspecting users. The “End call” option on the warning prompt will not just disconnect the call, but also instances of screen sharing that may be enabled at the time. Secondly, Google Pay Help adds the agentic AI chatbot for users reporting a fraud, which Bulusu says has been priceless so far in understanding the type and context of a fraud, and has helped their systems detect scams and frauds 21% quicker.
Need to build a credit ecosystem
HT asked Bulusu how he would assess Google’s mission to “make credit simple and accessible for everyone” and the direction it is expected to take with the addition of the Google Pay Flex Axis Bank Credit Card, enhancements such as Pocket Money and more lenders getting on-board. “I don’t believe that for the product, this journey is anywhere close to done. We are only talking about two forms of credit today, that is term loans or personal loans, and a co-branded credit card as a form of transactional credit. There are many more forms that exist based on many purposes and types of user. I believe we will see a lot more evolution, and building a complete credit ecosystem is the right answer,” explains Bulusu.
Google finds itself in prime position, as far as its footprint within India’s digital payments ecosystem is concerned. The National Payments Corporation of India (NPCI) data indicates that India’s UPI transactions have been consistently marking an upward trajectory, with 20,466.98 million transactions recorded in November. Among the UPI app market share, PhonePe (with 9,412.07 million transactions valued at ₹13,06,401.90 crore in October) and Google Pay (7,165.80 million transactions valued at ₹9,54,186.10 crore) are the dominant players in the digital payments space. Google says in the history of Pay in India, more than 530 million users have made at least one transaction on the platform. And at this time, there are more than 23 million merchants on board too, for receiving payments from customers.
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PhonePe, earlier this year, released co-branded credit cards with HDFC Bank and SBI Cards, offering significant returns in terms of cashbacks for payments made on the PhonePe platform, as well as many other online stores. It has been an active space, with Flipkart and SBI announcing a co-branded credit card recently, as did Indigo with SBI as well as IDFC First bank. Some previous popular co-brands include the Amazon Pay ICICI Bank credit card, HDFC’s partnership with Swiggy as well as the Tata Neu platform, as efforts to underline customer loyalty by offering better value. But co-brands have often not worked as well, including RBL’s partnership with Zomato which shuttered a few years ago, as well as IndusInd Bank and dining platform Eazydiner’s more recent watering down of their co-branded credit cards.
Bulusu insists they had this in their vision while designing the product with Axis Bank.
“The foundational principle for our product design was transparency, with users knowing confidently that if this is what a reward means, it always means that and they can use it in this way. Rewards were not an afterthought. There’s a temptation to think of this as a distribution play and could have done that years ago. The reason why we waited until now is we’ve done a lot of work in close partnership with issuers and jointly designed this in a way that makes the long-term economics of the card work. The lender has to find the card viable,” he explains.
For now, Google Flex credit cards are keeping things simple — every transaction will earn rewards in the form of ‘stars’, the amount of which will be calculated at the time of making the payment based on the amount and type of transaction. Bulusu tells HT there will be ways to speed up rewards earnings too, with certain transactions. Yet, he insists that what doesn’t change is that the value of 1 Star = ₹1. The moment you earn a star, you can immediately use it in the next transaction — that’s the template of simplicity which should be good news for users.