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On Wednesday, Google Pay announced that it has partnered with leading Indian banks to offer tokenized card services to customers on its UPI app.
Google Pay to Allow Tokenized Payments
The digital payments firm has added debit cards by SBI, IndusInd Bank and Federal Bank. Also, it has added Credit cards by IndusInd Bank and HSBC India to its tokenized offerings. This feature will enable users to make card payments through a secure digital token attached to their phone. This will also mean that users don't have to share their credit or debit card details. Visa will partner Google Pay for these transactions, the firm said.
Interestingly, Google Pay already allows customers of Kotak Mahindra Bank, SBI Cards and Axis Bank access to this. Google is expecting a significant jump in tokenized payments with market leaders coming on board.
Sajith Sivanandan, Business Head: Google Pay and NBU-APAC, said, "we are working closely with other banking partners to further expand the adoption of card-based payments with tokenization in India".
The move comes at a time when the NCPI introduced a 30% market share limit for third-party UPI apps. The digital payments firm has seen its market share going to rival PhonePe over the recent months. The latter has taken its spot as the market leader away, consequently. Also, because UPI apps can't charge processing fees, this move can allow Google Pay to monetize some of its customer base.
Ravindra Pandey, DY. Managing Director (Strategy) and Chief Digital Officer, SBI, said, "the tokenization of SBI Debit Cards with Google Pay would also enable our customers to foray into tap and pay mechanism without worrying about carrying their debit cards with them while going shopping".
TR Ramachandran, Group Country Manager, Visa, India and South Asia, said, “with tokenized, contactless forms of payment, millions of mobile first users will be able to use their credit and debit cards on Google Pay, bolstering confidence in a large segment that is new to digital".