According to TechCrunch, Google has launched a new co-branded credit card in India called Flex by Google Pay, partnering with Axis Bank. The card is built on the RuPay network and is directly linked to the UPI payments ecosystem, aiming to expand credit access in a country of over 1.4 billion where fewer than 50 million people currently hold a credit card. The card is issued digitally through the Google Pay app, offers a rewards program with virtual “Stars,” and provides flexible repayment options, including converting balances to installments. Google also announced a “Pocket Money” feature for families and new tools for small business merchants on its platform. The company’s senior director of product management, Sharath Bulusu, stated they aim to solve unique problems for new credit users and noted that over 530 million unique users have made a payment through Google Pay.
The UPI Credit Gap Is Real, But So Is The Competition
Here’s the thing: Google‘s move is strategically obvious. India’s digital payment revolution, powered by UPI, has been a massive success for moving money. But it hasn’t really cracked the credit nut. People use UPI to spend what they have, not to borrow. So embedding a credit line directly into that flow, via a familiar app like Google Pay, makes perfect sense. They’re trying to lower the intimidation factor for first-time users with features like upfront cost displays and flexible repayments.
But let’s not pretend this is some greenfield opportunity. The article notes they’re jumping into a pool already full of big players. Amazon, Flipkart, PhonePe, Swiggy, Zomato… basically every major consumer app in India is already doing a co-branded card with some bank. A Redseer report predicts these cards will make up over a quarter of the market by 2028. So Google isn’t creating a new market; they’re fighting for a slice of a hot, existing one. Their advantage? That massive Google Pay user base, which gives Axis Bank instant scale. It’s a classic platform play.
The Risks Aren’t Just About Market Share
Now, the bigger question is about credit risk and financial inclusion. Google’s goal is noble—to bring new users into the formal credit system. But there’s a fine line between “inclusion” and pushing debt onto populations that might not fully understand the terms. The promise of “flexible” repayments and EMIs can be a double-edged sword. It eases entry, sure, but it can also normalize carrying a balance and paying interest or fees, which a PwC report shows is already happening as cards get used for routine spending.
And what about Google itself? Financial services is a heavily regulated, low-margin, operationally intensive business with huge customer support burdens. Tech companies have a mixed track record here. They’re great at the front-end app experience, but the back-end grind of collections, fraud management, and regulatory compliance is a different beast. Partnering with Axis Bank offloads some of that, but the brand risk is still Google’s. If this goes south, it’s *their* reputation for “solving uniquely for the user” that takes a hit.
Pocket Money Is The Smarter, Stealthier Bet
Honestly, the “Pocket Money” feature might be more interesting in the long run. Instead of creating another prepaid card for kids like FamPay did, they’re leveraging the new UPI Circle framework. The money stays in the parent’s account until the kid makes a transaction. That’s genius. It reduces friction for families already on Google Pay and acts as a perfect on-ramp for the next generation of users. It’s not about credit; it’s about habit formation and trust within a closed ecosystem.
It’s the same logic with the small business tools, like syncing transaction reviews to Google Maps. They’re deepening the platform’s utility, making it stickier. Every new feature, whether for teens, merchants, or borrowers, is about increasing engagement and data flow within Google’s walls. The more you do, the more reasons you have to stay. In a tight race with PhonePe, that’s the real game.
So, Will It Work?
Google’s definitely coming in with a strong hand. They have the users, the tech, and a clear stated mission of financial inclusion. The Flex card will likely get millions of sign-ups because the distribution channel is so powerful.
But success won’t be measured by sign-ups alone. It’ll be measured by sustainable, responsible usage and profitability in a brutally competitive market. They’re not just competing with other apps; they’re competing with the deep-seated cash culture and credit skepticism of an entire population. Solving that is a much taller order than just issuing a digital card. They’ve made a smart, calculated bet. Now we see if the Indian user bites.
