Google Pay’s entry into the Indian market signaled the start of a steady and strategic expansion in the country’s digital finance ecosystem. With almost everyone having a mobile phone and access to free or low-cost internet, India presented a massive opportunity for Google to tap into the payment gateway space.

When Google Pay launched, it attracted users by offering cashback rewards ranging from ₹1 to ₹1 lakh. Many people referred others to the app to earn referral bonuses. Google understood the mindset and psychology of the Indian crowd, especially their attraction to rewards, and used it to expand its user base rapidly.

After acquiring a large user base, Google Pay started affiliating with multiple services, such as utility bill payments, bank transactions, offering loans, and more. While the platform made transactions easier and more convenient, it also led to job losses in traditional sectors. Despite its efficiency, Google Pay’s rise resulted in reduced employment in areas that were once dependent on manual or offline systems.

In the future, Google Pay may venture into various sectors like banking, education, and other essential services, potentially overtaking many of the current leading online businesses in India.

Initially, it offered free transactions to build a user base, but now Google Pay has started charging for utility bill payments, and soon it may begin charging for bank transactions as well. Once people get used to a digital service, they are less likely to go back to offline methods just to save a small amount. And what seems like a small charge to the user becomes significant revenue at scale for big businesses.

Thus, Google Pay has quietly sown the seeds of a business model that leverages user behavior, promotes brands, and generates revenue — all while appearing simple and user-friendly on the surface.

The Evolution of Google Pay in the Indian Market

2017: The Beginning with Tez
On September 18, 2017, Google launched Tez, a Unified Payments Interface (UPI)-based app tailored specifically for the Indian market. Developed under Google’s “Next Billion Users” initiative led by Caesar Sengupta, the app was available on both Android and iOS platforms and supported several regional languages, from Hindi to Kannada.

The app saw rapid adoption. Within just over a month, Tez was downloaded approximately 8.5 million times and facilitated more than 30 million transactions by the end of October 2017.

2018: Tez Becomes Google Pay
In August 2018, Tez was rebranded as Google Pay, aligning with Google’s global branding strategy while retaining its India-first approach.

2019: Explosive User Growth
Between late 2018 and the close of 2019, Google Pay saw a sharp increase in its monthly active users in India, rising from approximately 22 million to 67 million. This rapid growth was largely driven by its easy-to-use design and the introduction of features tailored specifically for merchants.

2020: Launch of Google Pay for Business
To assist small and medium-sized enterprises, Google launched a dedicated application called Google Pay for Business. This version offered instant onboarding via QR codes, digital income tracking, and basic bookkeeping tools, all at no cost. The company also partnered with Pine Labs to expand QR-based payments in physical retail environments.

2021: Scale and Expansion
By 2021, Google Pay had surpassed 150 million users worldwide and processed transactions valued at approximately $110 billion (or around ₹2.5 lakh crore) in the merchant segment alone.

2024: UPI Market Leadership
As of April 2024, Google Pay held around 37% of the UPI transaction volume in India, positioning it as the second-largest player in the market after PhonePe, which commanded roughly 48%. Google Pay also joined the Reserve Bank of India’s digital rupee (e-Rupee) pilot initiative, indicating its ambitions in digital currency and financial services.

Highlights of Google Pay for Business

• Quick Setup: Merchants could start accepting payments instantly using UPI-enabled QR codes, with no paperwork involved. 
• Financial Dashboard: Business owners received summaries of earnings, transaction logs, and automated reports within the app. 
• Smooth UPI Experience: Enabled direct customer-to-merchant payments, especially useful after the 2016 demonetization that boosted digital adoption.
• Notable Features of Google Pay for Business
• Hassle-Free Activation:
• Entrepreneurs and shopkeepers could start accepting digital payments in minutes using a UPI QR code—no complex forms or bank visits required. This ease of use made it especially appealing to small and medium enterprises across urban and rural India.