Google is expanding its push into consumer finance in India, launching a UPI-linked credit card, betting on the country of more than 1.4 billion people, where fewer than 50 million people currently own a credit card.
Google on Wednesday entered India’s growing co-branded credit card market with the launch of Flex by Google Pay, partnering with private lender Axis Bank to expand access to credit in India’s UPI-driven payments ecosystem.
In India, the rapid adoption of digital payments through the government-backed Unified Payments Interface (UPI) has changed the way consumers pay, but it has not led to widespread access to credit. This gap creates an opportunity for technology companies and banks to incorporate lending into widely used payment apps, helping to explain Google’s entry into the space.
According to the company, Flex by Google Pay is issued digitally through the Google Pay app and can be used both online and in-store. Built on the Indian government-backed RuPay network, the card includes a rewards program that awards virtual ‘stars’ for transactions, with each star worth ₹1. Users can monitor spending and billing within the app, choose whether to pay off their balance in full or convert it into installments, and manage security settings such as blocking cards and resetting PINs.
The launch builds on Google Pay’s broader efforts to expand access to credit in India, where it already partners with banks and non-bank lenders to offer personal and gold-backed loans through its app. Google Pay, one of the most widely used UPI platforms in the country, provides Axis Bank with access to a large and digitally active user base at a time when financial institutions are increasingly looking to expand credit distribution through technology platforms rather than physical branches.
Google started with Axis Bank, but aims to add more issuing partners soon to expand its co-branded credit card offering in India.
The price of the card, including interest and applicable fees, will vary depending on the user and credit profile, and there will be no application fee, Google said, adding that the app will display fees associated with repayment options upfront. EMI conversions are subject to processing fees and are subject to late fees as per the issuing bank’s policy.
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The Indian credit card market has expanded rapidly in recent years. According to a recent PwC report (PDF), the number of cards issued has grown at an annual rate of about 14% over the past three years to about 110 million, while transaction volume and transaction value have increased by nearly 30%. The average annual spend per card has increased from approximately ₹132,000 to approximately ₹192,000 (approximately $2,100) from approximately ₹132,000 ₹2,000 (approximately $1,450), indicating that cards are being used more frequently for everyday payments rather than occasional big-ticket purchases.
Despite the increase in the number of cards issued and the amount spent on credit cards in India, the expansion is primarily driven by existing users rather than a significant increase in the number of cardholders. Google aims to address this gap by attracting new users to its credit system, especially those who are wary of traditional card repayment structures. “The same user can receive more and more credit,” said Sharath Burrus, Google Pay’s senior director of product management, adding that the flexible repayment options are designed to ease concerns about unpredictable charges for first-time credit users.
“We think we understand the problem, the space, and the users well enough now that we can create unique solutions for them,” Bulusu told TechCrunch, explaining Google’s timing.
Google’s move comes amid increasing competition in India’s co-branded credit card market, with Amazon, Walmart Inc.’s Flipkart and PhonePe already offering similar products. Consumer internet platforms like food delivery companies Swiggy and Zomato and online travel companies like MakeMyTrip and Yatra are also entering the space by partnering with banks.
According to a report (PDF) by consulting firm Redseer, co-branded credit cards will account for about 12-15% of all credit cards in India by the fiscal year ending 2024, and are expected to capture more than a quarter of the market in terms of sales by 2028, growing at an annual rate of 35-40%.
Alongside the co-branded card launch, Google is also rolling out Pocket Money. This is a feature in the Google Pay app that allows parents to give their children limited access to digital payments. Built on the recently introduced UPI Circle feature, this feature allows parents to set a monthly spending limit of up to ₹15,000 and approve individual transactions initiated by their children.
The company says parents will receive notifications for each transaction and can review their spending history and pause access to features through its own Google Pay app. The move could also help Google expand Google Pay’s use and addressable market in India, where it competes fiercely with Walmart-backed PhonePe among the country’s leading UPI platforms.
Google’s Pocket Money feature follows earlier efforts by Indian fintech companies such as FamPay and Junio to enable digital spending for children through prepaid cards. However, unlike prepaid products, Google uses the UPI Circle framework to allow parents to control funds up to the moment the transaction takes place, rather than loading money upfront.
“With UPI Circle, the money stays in the parent’s account until it’s spent,” Bulusu said, adding that this approach makes it easier for families who are already accustomed to using Google Pay to introduce digital payments to their children. He said the feature reflects a broader bet on familiar payment apps as a way to build financial confidence among young users as digital payments become more popular.
Google is also upgrading the experience for small businesses in Google Pay, allowing customers to rate sellers directly after a transaction, and those reviews synced with the seller’s Google Maps listing. The company is also rolling out AI-powered advertising features within the Google Pay for Business app that help merchants create and launch ads.
Bulusu said more than 530 million unique users have made at least one payment through Google Pay, and more than 23 million small merchants have registered with the platform over the years. This reach gives the company confidence in introducing new financial products to users who are already accustomed to digital transactions, he added.
