Google Pay has joined hands with Indifi Technologies to provide instant loans to medium, small and micro enterprises (MSMEs) as the second-largest player in Unified Payments Interface (UPI) transactions in the country amps up financial services play.
The loans will be in the range of Rs 2.5 to Rs 3 lakh.
With a 35 percent share of monthly UPI volumes, Google Pay has been growing its financial services play over the past year like other payments leaders in India. It already provides loans and short-term credit to individuals and small merchants in tie-ups with IIFL Loans, CASHe, and ZestMoney, among others.
It also has tie-ups with SBI General Insurance, offers ticketing services, fixed deposit in partnership with Equitas Small Finance Bank and allows users to buy and sell gold through its app.
Sharath Bulusu, Director of Product Management at Google, said, “Access to reliable credit is critical to the massive MSME sector in India. This is even more important to help businesses adapt to the altered economic landscape in the aftermath of the pandemic.”
Other UPI leaders like PhonePe and Paytm, too, sell a host of financial services through their platforms. While UPI is what gets a large user base onto these platforms, it does not generate any revenues for these players.
UPI attracts a Zero-Merchant Discount Rate (MDR) as mandated by the government, meaning merchants cannot be charged any fees for accepting transactions through this mode. MDR is the key source of revenues in payments and, with that at zero, payments companies are monetizing by cross-selling mutual funds, stockbroking, insurance and credit services to customers on their apps.
Most fintechs are bullish on credit, both for individuals and MSMEs, on the back of the large credit appetite in India in contrast to the low penetration.
“We are committed to making reliable credit easy and convenient for more than 10 million merchants who use the Google Pay for Business app. Our collaboration with Indifi is a great step in this direction,” Bulusu added.
For Indifi Technologies, this comes after it tied up with Meta (erstwhile Facebook) to offer loans in the range of Rs 5 to Rs 50 lakh. The Gurgaon-based startup has also tied up with Amazon, Zomato, Swiggy and more.
Aditya Harkauli, Chief Business Officer, Indifi said, “Several small businesses in India still struggle to run their operations seamlessly due to lack of access to formal credit. Since its inception, Indifi has strived to address this credit gap. Our collaboration with Google Pay is another step in this direction.”
To secure the loan, eligible merchants on the Google Pay for Business app will see loan offers from Indifi which they can click to complete an online application. Once they submit the application, Indifi will evaluate the application and make an instant credit decision.
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