Google Pay Business Model – How Does Google Pay Make Money?

Key Takeaways:

Developed by Google, Google Pay is an online payment system in 2015 with Android Pay’s name and re-launched by its current name in 2018. Users can transfer money, pay bills, keep track of finances, and manage their tickets (movie, events, etc.) and coupons in one place.

Right now, Google Pay is operating in around 40 countries.

Google Pay is a free service for its users. The company’s primary source of revenue is the ads that it dispels on its app and website’s search pages. According to a report published in 2020, the site makes $4.5 billion in revenue per day. The business’s net worth is pretty high, as its transaction value is recorded to be a whopping $110 billion in 2020.

Company Profile:

Company NameGoogle Play (formerly Android Pay)
Founded- In:September 11, 2015 (as Android Pay) January 8, 2018 (as Google Pay)
Headquarters:Google, United States
FounderSujith Narayanan and Sumit Gwalani
Business ModelDigital Wallet
Product/ServicesDigital wallet, online transactions, budgeting, spending history
Competitive AdvantageBrand Recognition, International Presence
RevenueEstimated to be about $ 4.5 billion every day
CompetitorsAmazon Pay, PhonePe, Paytm, and Stripe


Digital payment has been becoming more and more common throughout recent years. Out of all the platforms that enabled online transactions, Google Pay has been the most famous international level. In addition to transferring money via the internet, you can also keep track of your financial history. All the services are provided with the promise of privacy, so you can put your fears to rest.

The official Google Pay app is free and allows you to handle all the web-based payments in one place. This helps you to manage everything related to one place without a fuss.

What is Google Pay?

Google Pay is an online digital wallet that enables its users to make an online transaction. It also provides services like keeping track of finances, history of expenses, etc. Users can also create groups and transfer money to their friends and family.

Google Play promises to provide utmost privacy regarding the transactions made between the users. The users can also keep track of their associated accounts with the help of the app. You can pay all of your bills simply through Google Pay without any fuss.

Not only that, the platform allows you to order food without checking a delivery app or paying for the fuel automatically. The app is free and will allows to handle all the web-based payments in one place. The service can also manage coupons, student ID cards, loyalty cards, boarding passes, transport or event tickets, and movie tickets.

Right now, Google Pay is operating in around 40 countries. It is supported by Android Lollipop 5.0 or later, iOS 11 or later, but only for the United States and India. EMV Payment Tokenisation Specification technology is used for the operation.

The authentication is done by pattern, pin codes, or biometrics in android. The payment cards for different services are done by taking a photo, by a payment card, listening in the Google account, entering the card info manually, or being provisioned by the app of the person who issued the card.

The supported networks include Visa / Visa Debit / Visa Electron, Mastercard / Debit Mastercard, American Express, Discover, Diners Club, JCB, Maestro, PayPal (in the US, Germany), EFTPOS in Australia, Interac in Canada, Nanaco stored-value card in Japan, Edy stored-value card in Japan, Suica stored-value card in Japan, Waon stored-value card in Japan, iD in Japan, QUICPay in Japan, and Unified Payments Interface / Rupay in India.

A Short History of Google Pay:

Google launched a service known as Google Wallet in 2018; as the name implies, the service was an online digital wallet that allowed its users to make online transactions through a phone or computer.

Its successor was launched in 2015 by Android Pay which used carrier baked Softcard technology acquired by Google in that same year. The service was compatible with 70% of android devices.

The service of Google Wallet was launched in different countries around the world at different times. In the US, it was launched in 2015, but when it was launched in the United Kingdom in 2016, Google Pay was supporting the MasterCard, Visa Credit, and debit cards from most of the central banks in the UK.

After that, the service was launched in Singapore in 2016, then in Australia a month later in July. The next turn was of the Republic of Ireland at the end of the year. Gradually, the service spread out to different countries of Europe and Asia.

In 2016, Google ran a public trial with an app known as Hands-Free in Silicon Valley. Through this app, the user can express their desire to make payment by Google and give their initials to the teller or cashier.

The cashier will then verify the customer’s identity with the help of a photo uploaded to the system previously. The transaction will only be authorized if the mobile’s GPS indicates that it is near a store that is part of this service.

Towards the end of 2017, things started to change. A UPI-based app called Tez was launched in India, which was then rebranded and merged with Google wallet to form Google Play. This merger extended to all the payments that were web-based through Google and other third-party services.

The whole app was redesigned, the crowning feature being the store’s display in the vicinity affiliated with and supporting Google Pay services. The service acquired an e-money silence in Lithuania at the end of 2018. Through this license, Google Pay could manage digital wallets, process transactions and payments, and issue e-money in European Union (EU).

The Google pay service had expanded in other European countries, including Austria, Bulgaria, Estonia, Greece, Hungary, Latvia, Lithuania, Netherlands, Portugal, and Romania. The only problem was that the official app was not available for the time being, but the users can access the official website. In 2020, the service had expanded and was operating across 40 countries.

The highlight of the year 2020 was the redesign of the official app in the United States. Another noteworthy thing is the introduction of Plex by the developers to help online bankers to provide services of checking and savings account on the app itself. Not only that, the app will allow the messaging feature.

Through the app, the users can explore and view personalized offers (which include redeeming offers like cash backs and discounts, etc.), and the most favorite, now the customers can keep track of their financial history with their banks. The expenses can also be added to the account by scanning the barcode on the receipts through the mobile camera or Google Photo and Gmail.

The old version will be discontinued in 2021, and peer-to-peer functionality will no longer be available. The new version will need to be downloaded and installed. To use all these features, Google Pay users will be required to register their phone numbers.

Another thing to be remembered is that contacts will not be imported from the previous version, and from now on, there will be a 1.5% or 31 cents fee per debit card transfer. The most basic features will still be available even if the app’s new version is not installed.

What is the Business Model of Google Pay?

The app is free, so users are not charged for the services. This means that all the transactions are free. Before, the company used to charge 2.9 % when topping up the wallets through debit cars. The only way the company makes money is by selling ads on the search pages of its app.

How Does Google Pay Make Money?

Like we have mentioned earlier, Google Pay is a free service for its users. The company’s primary source of revenue is the ads that it dispels on its app and website’s search pages. In fact, advertisement is the most significant contributor to the revenue of Google itself. As there are many users, and the number is increasing day by day, the income is nothing to scoff at. According to estimation, the site makes $4.5 billion in revenue per day.

Another revenue source is the transaction fee charged from the banks and product requests from Google Pay. There were around 67 million monthly users in 2017, and the number must have been gone up by now in 2021.

Google Pay Funding, Valuation & Revenue:

Not much has been mentioned about Google pay to fund, so there is not much we can tell about that in detail. The total funding amounted to $9.6 billion from international investors into startup lenders.

Other than that, the most memorable funding was raised by Neobank to rebrand Tez as Google Pay in India. Now, most of the revenue generated by Google Pay is from its advertisement, making a hefty amount of money. Other than that, it is a digital platform that is free for its users.

According to a report published in October 2020, the site makes $4.5 billion in revenue per day. The business’s net worth is pretty high, as its transaction value is recorded to be a whopping $110 billion.