Popular UPI payment app Google Pay has launched a co-branded credit card in partnership with Axis Bank on the RuPay network, which can be linked to customers’ UPI accounts for merchant payments.
The card offers instant cashbacks or rewards, which is a departure from the standard industry practice of crediting rewards or cashbacks at the end of the credit cycle or month.
“Where we have innovated is the way you can use your rewards. You earn rewards instantly on every transaction, and you can immediately use it on the very next transaction,” said Sharath Bulusu, senior director and product manager at Google.
This RuPay-UPI method has been gaining popularity as it offers the convenience and ubiquity of UPI as well as the credit and rewards that a typical credit card offers. Mastercard and Visa credit cards cannot be linked to UPI. Both RuPay and UPI are run by the National Payments Corporation of India.
According to Bulusu, UPI has enabled Google Pay to bring this innovation to redeem the rewards for the next payment.
Intense competition
The country’s largest UPI player PhonePe, had launched its co-branded RuPay credit card in partnership with HDFC Bank in June. A month later, it partnered with SBI Cards to offer both credit cards on Visa and RuPay networks.
Interestingly, Paytm, which started the monetisation journey much earlier, launched its first Paytm-Citibank cobranded credit card in 2019, followed by HDFC Bank in 2021. It added SBI to its credit card banking partners list soon after.
The other large UPI apps Cred and super.money, also have co-branded credit cards that can be linked to UPI.
Bulusu said that Google Pay does not wish to be early and do things the same way as the competition.
“RuPay has been successful for other players; they've been successful for their objective. For someone, the objective might have been user growth, for someone else it might have been revenue, for someone else it might have been something else,” Bulusu said.
He added that only one in five customers in India gets access to credi,t and if a company can solve it, the market can be huge.
Offering flexibility
Another Google Pay credit card feature is the flexibility in repayments, where customers can choose to repay the monthly bill in EMIs over a period of six or nine months.
“We figured out that flexibility in repayments and simplicity in repayments matter to users, but it is hard to build, and we wanted to solve it before launching the card,” Bulusu said.
Most payment or consumer apps offer 5-10 percent cashbacks/reward points for payments through their platforms, whereas they offer 3-5 percent cashback on partner apps and websites. The cards also offer 1-1.5 percent cashback on all other payments, including scan and pay for UPI payments.
Google Pay also has Ace credit card with Axis Bank on the Visa network. However, it is not a co-branded card in the strict sense of the terms that RBI has laid out.
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