Mumbai: Google Pay has been distributing personal loans on behalf of its lending partners for several years and has now expanded its product suite to include credit cards. However, while personal loans are a third-party product, the credit card launch is the first native product introduced 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 and signed up with a whole bunch of lenders three years ago,” said Sharath Bulusu, senior director of product management at Google Pay or GPay.
Bulusu views the credit card launch as an extension of the personal loan offering and an additional product within GPay’s credit ecosystem. Started 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 tokenise and link their existing cards to their GPay account for ‘tap and pay’ transactions on the platform, but doesn’t offer its own cards. “We support all of that on GPay, but we never built a product ourselves. Today, we're launching Flex, which is our first co-branded card on the RuPay network,” he said.
The first card under the ‘Flex’ programme is being launched in partnership with Axis Bank, and the platform will add more issuers in the coming months.
“The way I see them as being connected is part of a goal to say that we want to develop the entire credit ecosystem,” Bulusu told Mint, adding that eventually the platform could also look at other form factors for lending, such as credit lines on UPI.
More value for customers
Another area the company is trying to address is ease of access to a variety of repayment options. “What we've done is a couple of clicks from straight within the app, the user can see and compare the options they have. In fact, what we are expecting, and if the research bears 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 to new-to-credit customers.
“There are 50 million cardholders in the country. That number has not budged by much, it's moved by a very small percentage, which means we are giving more credit to the people who already have credit,” he said, adding that the true test will be to bring more people into the fold, which requires some work.
“Only about 20% of credit-eligible customers are getting access to formal credit. We're getting on a way to serve that other 80%,” Bulusu added.
The strategy is not just to bank on others’ products but also to offer value to credit customers by way of other solutions, such as its rewards programme to continue to drive transactions. The idea, Bulusu said, is to make rewards standardised and give them a “predictable value”. “We do want to create an experience, and that's why we’re doing what we did with rewards and repayments.”
“You earn stars for transactions, every star is a reward, and you can redeem them on any transaction that you do afterwards,” he said, adding that there are no additional eligibility criteria or wait period to redeem the rewards. “It comes back to the statement as an instant credit. So you're not waiting to see that happen.”