Google is expanding into consumer finance in India with the launch of a UPI-linked credit card, betting on a country of over 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 by launching Flex by Google Pay in partnership 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 the government-backed Unified Payments Interface (UPI) has changed the way consumers pay, but has not translated into widespread access to credit. This loophole has created an opportunity for tech companies and banks to incorporate lending features into widely used payment apps, which helps explain Google's entry into this 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 awards virtual 'stars' for transactions, with each star worth £1. Users can track expenses and bills in the app, choose to pay off their balance in full or in installments, and manage security settings such as blocking their card or resetting their PIN.
The launch builds on Google Pay's broader efforts to expand access to credit in India, where Google has already partnered with banks and non-bank lenders to personal offer and gold-backed loans through the app. As one of the most widely used UPI platforms in the country, Google Pay offers 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 started with Axis Bank, it intends to add more issuer partners soon to expand its co-branded credit card offerings in India.
Card prices, including interest and applicable fees, will vary depending on the user and credit profile, and there will be no application fees, Google said, adding that repayment opportunity fees are displayed upfront in the app. In case of EMI conversion, processing charges apply and late payment charges will be levied as per the policy of the issuing bank.
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The Indian credit card market has been growing rapidly in recent years. The number of unpaid cards has grown at a rate of around 14% annually over the past three years to around 110 million, while transaction volume and value have increased by almost 30%, according to a recent PwC report (PDF). Average annual spending on the card has increased from about £132,000 (about $1,450) to about £192,000 (about $2,100), suggesting that cards are more often used for routine payments rather than occasional large purchases.
Despite an increase in unpaid cards and credit card spend in India, the expansion was largely driven by existing users rather than a significant increase in card ownership. Google aims to help fill this gap by bringing new users into the lending system, especially those who are wary of traditional card repayment structures. “It's the same users who are getting more and more credit,” said Sharath Bulusu, senior director of product management at Google Pay, adding that the flexible repayment options are intended to alleviate concerns about unpredictable billing for first-time users.
“We think we now understand the problem, the space, and the user well enough to solve something specifically for them,” Bulusu told TechCrunch, explaining Google's timeline.
Google's decision comes amid growing competition in India's co-branded credit card market, where companies such as Amazon, as well as Walmart-owned Flipkart and PhonePe, already offer similar products. Consumer online platforms such as food delivery companies Swiggy and Zomato and online travel agencies including MakeMyTrip and Yatra have also entered this space in partnership with banks.
Co-branded credit cards accounted for around 12-15% of total credit cards in India in the fiscal year ended 2024 and are projected to account for more than a quarter of the market by volume by 2028, growing at a rate of 35-40% annually, according to the study report (PDF) by consulting company Redseer.
In addition to introducing co-branded cards, Google is also rolling out “Pocket Money,” a feature in the Google Pay app that allows parents to give their children limited access to digital payments. Based on the recently launched UPI Circle functionality, this feature allows parents to set a monthly spending limit of up to ₹15,000 or approve individual transactions initiated by their child.
According to the company, parents receive notifications about each transaction and can view their spending history or pause access to the feature through their own Google Pay app. The move could also help Google expand the range of uses and market it can reach with Google Pay in India, where it is available competes closely with Walmart-backed PhonePe among the country's leading UPI platforms.
Google's pocket money feature follows previous efforts by Indian fintechs such as FamPay and Junio, which sought to enable children to spend digitally via prepaid cards. However, unlike prepaid instruments, Google uses the UPI Circle platform to allow parents to retain control of the funds until the transaction is made, rather than loading the money upfront.
“With UPI Circle, the money stays in the parent's account until it is spent,” Bulusu said, adding that this approach makes it easier for families who are already comfortable using Google Pay to introduce their children to digital payments. He said the feature reflects broader use of familiar payment apps and aims to build financial confidence among younger users as digital payments become more widespread.
Google is also improving the Google Pay experience for small businesses, allowing customers to rate sellers immediately after a transaction, and those reviews sync with the seller's Google Maps listing. The company is also rolling out an AI-powered advertising feature in the Google Pay for Business app that helps merchants create and serve 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 on the platform over the years. He added that this reach gives the company the confidence to introduce new financial products to users who are already comfortable transacting digitally.
