Copyright © HT Digital Streams Limited All rights reserved. Google Pay looks beyond distribution, wants to create a credit ecosystem As of date, Google Pay allows users to sign their existing cards and connect them to their GPay account for ‘tap and pay’ transactions on the platform, but does not offer its own cards. Summary Google Pay is evolving its business model in India from a simple distributor of third-party personal loans to a comprehensive credit ecosystem provider. Mumbai: Google Pay has been distributing personal loans on behalf of its lending partners for several years and has now expanded its product line to include credit cards. However, while personal loans are a third-party product, the credit card launch is the first native product launched by the payments giant, which aims to go beyond distribution and create a credit ecosystem on the platform. “We’re not doing this simply because we have distribution power. If that was the case, I would have gone to a whole bunch of lenders three years ago,” said Sharath Bulusu, senior director of product management at Google Pay or GPay. Bulusu sees the credit card launch as an extension of the personal loan offer and an additional product within GPay’s credit ecosystem. Starting with one lending partner, the platform today sells personal loans on behalf of four banks and non-banking financial companies (NBFCs). As of date, the platform allows users to sign their existing cards and link them to their GPay account for ‘tap and pay’ transactions on the platform, but does not offer its own cards. “We support all of this on GPay, but we never built a product ourselves. Today we are launching Flex, which is our first co-branded card on the RuPay network,” he said. The first card under the ‘Flex’ program is being launched in partnership with Axis Bank, and the platform will add more issuers in the coming months. “The way I see them connected is part of a goal to say we want to develop the entire credit ecosystem,” Bulusu told Mint, adding that eventually the platform could also look at other form factors for loans, such as lines of credit on UPI. More value for customers Another area that the company is trying to address is ease of access to a variety of repayment options. “What we’ve done is a few clicks from right within the app, the user can see and compare the options they have. In fact, what we expect, and if the research comes out, will happen, is that users will actually discover the faster repayment option, because they will realize that there is more value in paying off the outstanding money sooner.” GPay’s approach remains cautious. The credit card product has been rolled out to a select group of customers and will later be made available to the entire customer base, as well as new-to-credit customers. “There are 50 million cardholders in the country. That number hasn’t changed much, it’s moved by a very small percentage, which means we’re giving more credit to the people who already have credit,” he said, adding that the real test will be bringing more people into the fold, which will take some work. “Only about 20% of creditworthy customers get access to formal credit. We are working to serve the other 80%,” Bulusu added. The strategy is not only to bank on others’ products, but also to offer value to credit customers through other solutions, such as its rewards program to continue to drive transactions. The idea, Bulusu said, is to standardize rewards and give them a “predictable value.” “We do want to create an experience, and that’s why we do what we did with rewards and refunds.” “You earn stars for transactions, each star is a reward, and you can redeem it on any transaction you do after that,” he said, adding that there is no additional eligibility criteria or waiting period to use the rewards. “It comes back to the statement as an immediate credit. So you don’t wait to see it happen.” Get all the industry news, banking news and updates on Live Mint. Download the Mint News app to get daily market updates. more topics #upi Read next story