How Does GooglePay Earn Money? (GooglePay Business Model Revealed)
google pay business model how google pay earns money

Google Pay is an online payments app developed by Google to power in apps and tap to pay purchases on mobile devices.

Users in the US can use Google Pay on iOS devices, although the functionality is constrained. Google Pay allows users to make payments using their Android devices.

It can support online payments, in-app purchases, contactless payments in stores and even for sending peer-to-peer money.

Google Pay can do all the legwork for anyone, whether shopping for a new pair of sneakers online or getting their morning job.

Globally, Google Pay offers a number of revenue-generating alternatives.

The $4.1 billion in transaction fees from banks or merchants as well as the $0.4 billion in ads and product offers within Google Pay are two possible sources of income.

Google Pay Business Model

In India, Google Pay has steadily increased. Sundar Pichai, the CEO of Alphabet and Google, stated that the firm has learned from the positive experience in the nation and will soon release a redesigned digital payments product globally.

Because of its business model, which entails the following elements, Google Pay is successful in India compared to other mobile wallets.

In order to innovate and build collaboratively, Google Pay focuses on partnerships, localization, and an ecosystem approach. To that end, it has formed strong ties with the government and central bank, made its products interactive, and made them available for ecosystem collaboration.

A new tool called Google Pay for Business, which was a free and simple way for small retailers and storefronts to enable digital payments without the headache of a cumbersome verification procedure, helped the company expand its support for small enterprises.

By establishing a location on Google pay to assist people in finding entry-level opportunities that aren't often readily available online, Google Pay also aids job seekers.

It worked with the government to develop the Digital Payment Abhiyan, which will raise awareness of cashless transactions and online financial security throughout the nation.

To assist people in rural areas with poor internet connections and their quest for information, the business has introduced the Vodafone Idea Phone Line.

Instead of looking for the transaction date and time, customers of its entity-based UX search for the person they paid earlier.

When checking a payment record, customers who utilize the entity-based model get individual chat leads of each person or business they do business with.

In India, Google Pay launched the Spot platform, which gives companies a means to engage customers and build experiences within the Google Pay app.

Services like UrbanClap, Goibibo, MakeMyTrip, RedBus, and Eat are widely used. The first participant in its early access programme was Fit and Oven Story.

As Google Pay offers substantial rebates and discounts on many transactions, scratch cards are an additional draw.

The associated bank account receives a straight credit for these cash backs. Additionally, the software offers a variety of payment methods so users can conduct transactions using their mobile numbers and Virtual Payment addresses.

In order to create "FedNow", a new interbank real-time gross settlement service for quicker digital payments in the US, Google has written to the US Federal Reserve Board outlining the successful example of UPI-based digital payments in India.

In addition to providing free public Wi-Fi to communities in three different locations, the business wants to create a research facility specializing in artificial intelligence applications in industries including healthcare and education.

How Does Google Pay Make Money?

The first name of Google Pay was ‘TEZ’ and it first launched in August 2017. After that, the name ‘TEZ’ was changed to Google Pay. As of 2017, Google Pay is running in India, Australia, Canada, Japan, Russia, Singapore, Ukraine, the UK, and the USA. 

Google Pay does not charge its user for using google wallet. Receiving and sending money through UPI is entirely free of cost.

The company had intended to charge a 2.9% fee for funds paid using a debit card. However, as previously noted, the plan has been dropped and everything is now free.

The app has more than 67 million active users per month and over 2.5 billion transactions and presently averages over US$110 billion in transaction value per year.

The user of this app can now make payments at more than 200,000 physical stores in more than 3,500 cities and towns as well as more than 2,700 online retailers. Google Pay makes money in several ways.

Mobile Recharges:

The primary source of revenue is mobile recharge. Whenever a user recharges any operator sim from this app, then Google Pay gets a commission from that operator on every recharge.

Bill Payments:

Google Pay allows users to make any kind of bill payment from this app such as electricity, gas, DTH, landline, broadband, insurance, postpaid, and, many more.

Whenever users have done any bill payments through this app and then this app takes a commission from the operators.

UPI Payments:

Google Pay does not earn any money from UPI transactions. They simply evaluate the transaction data you provided in order to create their new product.

The main purpose of the use of Google pay is UPI payment. Additionally, the app offers extra features including bill payment and recharge. People use this app to access either or both of these services, which results in revenue for the app from both services.

Growth of Google Pay in India

With $110 billion in yearly transaction value, Google Pay has become the undisputed leader in UPI payments in India. Google pay has 150 million monthly active users.

According to data from the RBI, mobile wallet payments totalled Rs 1.84 lakh crore in the most recent fiscal year, which ran from 2018 to 2019.

Google Pay is the second largest UPI payment app with a market share of 33.3% in India. The app is similar to a chat app that is user-friendly and accessible in regional languages.

Customers utilize the platform to pay bills, purchase lunch from street sellers, and purchase train tickets. Local establishments in India have started to accept Google Pay payments through a phone app.

The updated Google Pay platform offers features including food security, Google Pay for Business, e-KYC, and easier onboarding in addition to tokenized cards for more secure payments.

Other fintech businesses, such as Paytm, PhonePe, Amazon Pay, and Airtel Payments Bank, WhatsApp Pay among others, are fiercely competing with Google Pay.

Fund Raised By Google Pay

In a seed funding round for their NeoBank, Fi, the founders of Google Pay in India raised $13.2 million in January 2020. Sequoia India and Ribbit Capital led the round.

Along with Hillhouse Capital, David Velez, Kunal Shah, and other venture capitalists took part in the investment rounds. 

Investment app, ETMONEY, has partnered with Google to offer Google Pay users a route to invest in mutual fund schemes and National Pension System (NPS) in October 2020.

Through this partnership, Google Pay users will be able to quickly choose the best mutual fund schemes and invest in them using their Google account and UPI ID.

Google Pay users can access this feature without having to create a User ID. The same applies if one also wants to invest in NPS.

According to co-founders Sujith Narayanan and Sumit Goalani of Google Pay India, formerly known as Google Tez, the Neobank startup Fi now has a $50 million valuation thanks to the seed funding.

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