Google Pay has long been an anomaly in India’s fintech industry. It is the only U.S. tech giant that has gained a strong foothold in the Indian payments sector and has been able to maintain at least a 33% share of the Unified Payments Interface (UPI) market for almost eight years.
Paramount to Google Pay’s success in India has been its leveraging of the state-backed UPI payments rail, which has more than 500 million users, facilitates over 20 billion transactions each month, and accounts for 84% of India’s digital retail payments. By tapping into India’s real-time, bank-account-based UPI system, Google Pay bypassed card networks and made payments fast, easy, and interoperable across banks.
Partnering with banks has also contributed to Google Pay’s success in India. It has a wide array of banking partners, including Axis Bank, HDFC Bank, ICICI Bank, and IDFC First Bank.
Google Pay is now looking to further leverage its close ties with UPI and local banks and, in mid-December, announced the launch of Flex, a UPI-powered, digital, co-branded credit card built on the RuPay network. The digital card is issued through the Google Pay app and can be used both online and in physical stores. It offers a rewards program, tools to monitor spending and bills, and flexible repayment options, including full balance repayment or installment plans.
Sharath Bulusu, Google Pay’s senior director of product management, noted in a blog post, “Credit cards can be a powerful tool for financial flexibility. But even today, transactional credit in India remains underpenetrated, with only about 50 million credit card holders in the country. We see a unique opportunity to reimagine this experience for the next generation of card users.”
The launch of the credit card signals Google Pay’s determination to generate bigger and better revenue streams in India. Keep in mind that the company does not directly earn money from UPI transactions because they are free. Instead, it earns revenue from commissions on bill payments/recharges, advertising/brand promotions via scratch cards, and offering financial products like loans and insurance through partners.
With a credit card of its own, Google Pay is taking an important step toward becoming a larger player in India’s consumer finance market at a time when just a small fraction of the population has a credit card. The potential addressable market is enormous. India has a population of more than 1.47 billion people, but currently just 38 million to 40 million unique credit card users.
One factor that Google Pay will have to factor into its business strategy is that credit card growth in India decelerated in 2025 amid intensifying regulatory scrutiny from the Reserve Bank of India (RBI). In the second fiscal quarter of 2026, banks issued 4.4 million new credit cards, a steep 28% annual decline from 6.1 million cards issued in the same period last year. As a result, growth in cards in circulation slowed to 6%.
Competition in India’s co-branded credit card market is, meanwhile, intensifying. Amazon, Flipkart, and PhonePe, as well as the consumer internet companies Swiggy and Zomato, offer similar products.
Auguring well for Google Pay’s credit card is its tie-up with state-backed RuPay. The RBI is promoting RuPay as part of the “Digital India” and “Atmanirbhar Bharat” (self-reliant India) initiatives to foster economic independence. Transaction processing for RuPay happens entirely within India, which makes clearing and settlement cheaper than for international networks like Visa and Mastercard, where data is often routed through servers outside the country. These savings allow banks to offer cards with lower or no annual maintenance fees to customers.
Overall, prospects for Google Pay’s new credit card in India look promising, but we expect that it will take some time before the product starts to see results – especially if regulatory scrutiny from the RBI remains high.