Google has partnered with banks and other lenders in India to enable credit lines for individuals and merchants on the Google Pay app as the tech giant broadens its Indian payments app, processing about 4 billion transactions monthly, and makes its strongest push for financial inclusion in the South Asian market.
The company has partnered with Axis Bank, allowing the lender to extend loans to individuals on Google Pay and tied-up with ICICI Bank for credit lines atop of UPI to merchants, Ambarish Kenghe, VP of Google Pay, told TC in an interview.
Even as nearly a billion people in India have bank accounts, they aren’t parking a significant money in those accounts for credit bureaus to build meaningful profiles on them. As a result, India’s credit bureau data book remains thin, which continues to make it difficult for banks and other financial institutions to build confidence to extend credit to the vast majority of the population in the world’s most populous nation.
Kenghe has a personal connection with this challenge. The Google executive told an audience at the company’s annual India event Thursday that his uncle stepped in to pay when he needed to pursue higher education back in the day. “Without that, it’s fair to assume I wouldn’t be standing here today,” he said.
“The way we think of payments is geo-shifting money. What would make a huge difference is time-shifting money, which is credit. This creates opportunity, growth and development,” he told TC.
To be sure, Google is not extending the loan itself, nor is it underwriting the customers. “What we are doing is enabling credit, simplifying the process, and working with the industry to ensure responsibility,” he said, adding that Google will ensure that it doesn’t create unnecessary risks for lenders nor does it over-leverage borrowers.
The firm is also enabling lenders to extend sachet loans to merchants, hoping to serve their small-ticket credit requirements.
Google has also partnered with HDFC Bank to extend support for the Rupay card network, allowing individuals to make merchant transactions directly through their UPI credit line. Google said it has also partnered with ICICI Bank to extend credit lines to customers.
Google Pay is the No. 2 most popular app for transactions on the UPI network, the payments rail built by a coalition of banks. The app is used for nearly 4 billion transactions a month, the company said. Google enabling credit to consumers is a win and need of the hour in India, where both individuals and merchants have had to traditionally rely on predatory lenders.
More to follow.
