Google is expanding its push into consumer finance in India with the launch of a UPI-linked credit card, betting on a country of over 1.4 billion people where less than 50 million currently hold a credit card.

On Wednesday, Google entered India’s growing co-branded credit card market with the launch of Flex on Google Pay, partnering with private lender Axis Bank to expand access to credit in the country’s UPI-driven payments ecosystem.

India’s rapid adoption of digital payments through the government-backed Unified Payments Interface (UPI) has changed how consumers pay but has not translated into broad access to credit. That gap has created an opportunity for technology companies and banks to embed lending into widely used payment apps, which helps explain Google’s move into the space.

Google Pay’s Flex is issued digitally through the Google Pay app and can be used both online and at physical merchants, the company said. Built on the Indian government-backed RuPay network, the card includes a rewards program that credits virtual “Stars” on transactions, with each Star worth ₹1. Users can monitor spending and bills within the app, choose to pay balances in full or convert them into installments, and manage security settings such as blocking the card or resetting a PIN.

The launch builds on Google Pay’s broader effort to expand access to credit in India, where it already cooperates with banks and non-bank lenders on personal offer and loans backed by gold through the app. As one of the country most widely used UPI platformsGoogle Pay offers Axis Bank access to a large, active digital user base at a time when lenders are increasingly looking to expand credit distribution through technology platforms rather than physical branches.

While Google started with Axis Bank, it aims to add more issuer partners soon to expand its co-branded credit card offering in India.

Card pricing, including interest and applicable charges, will vary by user and credit profile, with no application fees, Google said, adding that charges associated with payment options are displayed ahead of the app. Processing charges are applicable on EMI changes, and late payment charges will be levied as per the policy of the issuing bank.

The credit card market in India has been expanding rapidly in recent years. The number of outstanding cards has grown at an annual rate of about 14% over the past three years to nearly 110 million, while transaction volumes and amounts have increased by nearly 30%, per recent PwC report (PDF). Average annual spending per card increased from about ₹132,000 (about $1,450) to nearly ₹192,000 (about $2,100), suggesting that cards are used more often for routine payments than occasional big-ticket purchases.

Despite the growth in the number of outstanding cards and credit card spending in India, the expansion has largely been driven by existing users rather than a meaningful increase in the number of cardholders. Google aims to help solve that gap by bringing new users to the credit system, especially those wary of traditional card payment structures. “Same users getting more credit,” said Sharath Bulusu, senior director of product management for Google Pay, adding that flexible payment options are designed to ease concerns about unpredictable billing for first-time credit users.

“We thought we understood the problem, the space and the user well enough to solve something unique for them,” Bulusu told TechCrunch, explaining Google’s timing.

Google’s move comes amid growing competition in India’s co-branded credit card market, where companies including Amazon, as well as Walmart-owned Flipkart and PhonePe, already offer similar products. Consumer internet platforms such as food delivery companies Swiggy and Zomato, along with online travel companies including MakeMyTrip and Yatra, have also entered the space along with banks.

Co-branded credit cards accounted for about 12-15% of total credit cards in India in the financial year ending 2024 and are expected to capture more than a quarter of the volume market by 2028, growing at an annual rate of 35-40%, according to a report (PDF) by the consultancy firm Redseer.

Along with the co-branded card launch, Google also launched “Pocket Money,” a feature in the Google Pay app that allows parents to give children limited access to digital payments. Built on the recently introduced UPI Circle functionality, the feature allows parents to set a monthly spend of up to ₹15,000 or approve individual transactions initiated by the child.

Parents will receive notifications for each transaction and can view spending history or stop accessing the feature through their own Google Pay app, the company said. The move will also help Google expand the use of Google Pay and addressable market in India, where it is competes closely with Walmart-backed PhonePe among the leading UPI platforms in the country.

Google’s Pocket Money feature follows earlier efforts by Indian fintechs such as FamPay and Junio, which sought to enable digital spending for children through prepaid cards. However, unlike prepaid instruments, Google uses the UPI Circle framework to allow parents to control funds until the moment a transaction is made, instead of pre-loading.

“With UPI Circle, the money stays in the parent’s account until it is spent,” said Bulusu, adding that the method makes it easier for families who are already comfortable using Google Pay to introduce children to digital payments. He said the segment reflects a broader bet on familiar payment applications as a way to build financial confidence among young users as digital payments become more widespread.

Google also upgraded the experience for small businesses with Google Pay, allowing customers to rate merchants directly after a transaction, with reviews that sync with the merchant’s Google Maps listing. The company also launched an AI-powered advertising feature within the Google Pay for Business app that helps merchants create and launch ads.

More than 530 million unique users have made at least one payment through Google Pay, while more than 23 million small merchants have been on board the platform over the years, Bulusu said. This achievement, he added, gives the company confidence that it can introduce new financial products to users who are already comfortable with digital transactions.