Google announced a new launch—Google Pay Flex Axis Bank Credit Card, which a UPI-powered, digital, co-branded credit card with Axis Bank. With this move, Google enters the credit card space, after PhonePe had launched co-branded a credit card with RuPay in partnership with HDFC Bank in June, and later released another credit card with SBI on both RuPay and Visa network. Other apps such as CRED and Paytm also offer co-branded credit cards that can be linked to UPI.

With both RuPay and UPI operated by the National Payments Corporation of India (NPCI), tighter integration between the card network and the real-time payments system has become possible. This marks tailwinds supporting RuPay in the credit card ecosystem, as fintechs and banks increasingly look to leverage the scale of UPI usage in the country. With RuPay credit cards, consumers can now access credit even at kirana stores, aiding deeper penetration in tier-2 and tier-3 markets.

MasterCard and Visa, which are still not linked to UPI, are both networks that function on transaction fees charged to merchants and banks for using their payment networks. Whereas, UPI has near zero merchant discount rate (MDR). With credit consumption migrating to UPI, these networks risk being sidelined from India’s fastest-growing payments channel.

“Flex makes the credit card experience as intuitive and ubiquitous as the UPI payments people make every day, all backed by the trusted, secure experience of the Google Pay app,” said Sharath Bulusu, Senior Director - Product Management, Google Pay in a blog post.

Customers can apply for Flex directly within the Google Pay app in just a few minutes as there is no physical paperwork. The credit card can be used to pay at both offline merchants and online apps. Instead of the usual points that other cards offer at the end of the month, users will earn ‘stars’ that are instantly redeemable on any Flex transaction, with a value of 1 Star = ₹1.

Like other credit cards, one can track spends, pay bills and manage security via the Google Pay app.

Another new feature added is ‘Pocket Money’, enabling parents to grant their children access to digital payments with built-in supervision. Parents can do this through two flexible modes. Set a monthly limit of up to Rs 15,000 that allows the child to spend independently within that boundary. Alternatively, they can choose to approve every transaction request initiated by the child.