Google is expanding its push into consumer finance in India with the launch of a UPI-linked credit card, betting on a country of more than 1.4 billion people where fewer than 50 million 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 the country’s UPI-based payments ecosystem.
India’s rapid adoption of digital payments through its government-backed Unified Payments Interface (UPI) has changed the way consumers pay, but has not translated into widespread access to credit. That gap has created an opportunity for tech companies and banks to integrate lending into widely used payment apps, helping to explain Google’s move into the space.
Flex by Google Pay is issued digitally through the Google Pay app and can be used both online and at brick-and-mortar merchants, the company said. Built on the Indian government-backed RuPay network, the card includes a rewards program that credits virtual “Stars” on transactions, with each star worth ₹1. Users can track spending and bills within the app, choose to pay off balances in full or in installments, and manage security settings such as blocking the card or resetting a PIN.
The launch builds on Google Pay’s broader effort to expand access to credit in India, where it has already partnered with banks and non-bank lenders to personal offer and gold loans through the app. As one of the country’s most widely used UPI platforms, Google Pay gives Axis Bank access to a large, digitally active user base at a time when lenders are increasingly looking to scale credit distribution through technology platforms rather than physical branches.
While Google has started with Axis Bank, it aims to add more issuers soon to expand its co-branded credit card offering in India.
Pricing for the card, including interest and applicable fees, will vary based on user profile and credit profile, with no application fee, Google said, adding that fees associated with repayment options are displayed up front in the app. EMI conversions are subject to processing charges and late payment charges will be levied as per issuing bank’s policy.
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India’s credit card market has been expanding rapidly in recent years. The number of cards outstanding has grown at an annual rate of about 14% over the past three years to about 110 million, while the volume and value of transactions have grown close to 30%, per recent PwC report (PDF). The average annual spend per card has increased from about ₹132,000 (about $1,450) to about ₹192,000 (about $2,100).
Despite the increase in the number of outstanding cards and credit card spending in India, the expansion has been driven largely by existing users rather than a significant increase in the number of cardholders. Google aims to help address this gap by bringing new users into the credit system, particularly those wary of traditional card payment structures. “It’s the same users who are getting more and more credit,” said Sharath Bulusu, senior director of product management for Google Pay, adding that the flexible repayment options are designed to ease concerns about unexpected fees for first-time credit users.
“We think we now understand the problem, the space and the user well enough to solve something uniquely for them,” Bulusu told TechCrunch, explaining Google’s timeline.
Google’s move comes amid growing competition in India’s co-branded credit card market, where the likes of Amazon, as well as Walmart-owned Flipkart and PhonePe, already offer similar products. Online consumer platforms such as food delivery companies Swiggy and Zomato, along with online travel companies including MakeMyTrip and Yatra, have also entered the space in partnership with banks.
Name-brand credit cards accounted for about 12-15% of India’s total credit cards in the fiscal year ending 2024 and are expected to capture more than a quarter of the market by volume by 2028, growing at an annual rate of 35-40%, according to report (PDF) by consulting firm Redseer.
Alongside the launch of the co-branded card, Google is also rolling out “Pocket Money”, a feature in the Google Pay app that allows parents to give children limited access to digital payments. Based on the recently introduced UPI Circle functionality, the feature allows parents to set a monthly spending limit of up to ₹15,000 or approve individual transactions initiated by the child.
Parents receive notifications for each transaction and can view spending history or turn off access to the feature through their own Google Pay app, the company said. The move could also help Google expand the use of Google Pay and the addressable market in India, where it it competes closely with Walmart-backed PhonePe among the leading UPI platforms in the country.
Google’s Pocket Money feature follows earlier efforts by Indian fintechs such as FamPay and Junio, which tried to enable children’s digital spending through prepaid cards. However, unlike prepaid media, Google uses the UPI Circle framework to allow parents to retain control of funds until the time of a transaction, rather than loading funds upfront.
“With UPI Circle, the money stays in the parent’s account until it’s spent,” Bulusu said, adding that the approach makes it easier for families who already use Google Pay to introduce children to digital payments. He said the feature reflects a broader bet on familiar payment apps as a way to build financial confidence among younger users as digital payments become more pervasive.
Google is also upgrading the small business experience on Google Pay by allowing customers to rate merchants directly after a transaction, with those reviews syncing with the merchant’s Google Maps listing. The company also has an AI-powered advertising feature in the Google Pay for Business app that helps merchants create and run ads.
More than 530 million unique users have made at least one payment through Google Pay, while more than 23 million small merchants have signed up for the platform over the years, Bulusu said. That reach, he added, gives the company the confidence to introduce new financial products to users who are already comfortable transacting digitally.
