Source: ET Bureau
Google may partner with top Indian lenders to roll out this feature by the end of this year.
US-based technology behemoth Google will roll out a credit feature for small and medium enterprises on its payment platform Google Pay, a top executive told ET.
The rollout, in partnership with top Indian lenders, will go live by year-end and help over 3 million verified merchants avail instant credit on their Google Pay app, if the bank partners deem them credit worthy.
The new feature will be among a slew of ongoing and upcoming initiatives that it has planned in order to gain market share in India’s rapidly digitising SME segment amid the ongoing Covid-19 pandemic.
Credit will be given to merchants on a pre-approved basis – similar to its instant consumer loan feature launched in 2018. The onus of underwriting and collection would be on partner lenders. ET could not independently verify the names of its partner lenders.
“In these unprecedented times, we are doing a variety of things to help merchants and consumers,” said Ambarish Kenghe, senior director for product management, Google Pay, in an exclusive interview.
“To this end, we’re working with our partner financial institutions to surface their loan offerings for merchants, which can be availed right within Google Pay, something that is especially pertinent in these uncertain times,” Kenghe said.
Google Pay’s consumer loan product is live with banks such as HDFC Bank, ICICI Bank, Federal Bank, Axis Bank and Kotak Mahindra Bank.
The move comes at a time when big technology firms have turned aggressive in capturing India’s lucrative, yet underpenetrated SME sector, by offering a plethora of services.
The competition in the space has intensified with Facebook’s investment in Reliance Industries-owned Jio Platforms. Its popular messaging service, WhatsApp, will look to facilitate commerce through JioMart and integrate WhatsApp Pay, building an ecosystem for smaller retailers. Amazon Pay, too, has been pushing to bring offline merchants onto its platform.
Several other Indian fintech companies, such as Paytm, PineLab, BharatPe and PhonePe, are also pushing out value-added services to attract unbanked and undigitized merchants – who are looking to take their physical business online – onto their respective platforms.
“The discussions are still in early stages and we are yet to devise a timeline for a formal launch; the expectation, however, is to go live before the end of the year,” said Kenghe. “The loan product will be offered by the financial institutions and the emphasis is to ensure that the merchant has full control and visibility of the loan application process.”
Additionally, Google Pay is also seeking to attract larger merchants onto its platform.
The Unified Payments Interface, or UPI-based platform, also rolled out its ‘Nearby’ Spot feature recently, which enables small businesses to create a digital storefront online through the app interface. It has seen large merchants such as Zomato, Grofers, MakeMyTrip, 5 Paisa and Dunzo come on stream. “The emphasis now is to get smaller merchants onboard,” said Kenghe.
“There are more than 60 million SMEs and 30 million merchants and retailers in the country,” he said. “It’s an important space for us where many transactions happen. We are very focused on helping the merchants during these times. The first piece is enabling the merchant with digital payment facilities.”
As per data accessed by ET, Google Pay is currently the leader in UPI transactions in India, having processed over 500 million of the total 1.2 billion transactions in May on the National Payments Corporation of India-operated channel.