How Google Pay allows you to make purchases without using your credit card

Here's how you can make payments securely using virtual tokens generated by Google Pay.

How Google Pay allows you to make purchases without using your credit card

According to the Reserve Bank of India (RBI), 3 billion digital payments were made in India in March 2020. Although this dropped to 2.36 billion in April, this was primarily due to customers cutting down on spending and to e-commerce companies halting their operations for a few days due to the lockdown. 

The value of digital payments in the country has grown at an impressive CAGR of 55% over the last five years. 

Google is among the leading private players in this space. It came up with its own Google Pay app, which was primarily designed to use the UPI system, wherein any user could make payments directly to the bank using a UPI ID generated by Google Pay. However, Google Pay had no method of using a credit card before.

Most Indians still have the fear of putting their credit card details on websites or even handing them over to shop owners. The fear of such information being misused ranks high in the mind of most users. Well, Google has come up with a solution for the same by the introduction of payment tokenisation.

How tokenisation works

Credit card numbers and other details are considered sensitive information that, if misused, can cause a lot of financial damage to the owner. Google Pay converts your 16-digit credit card number into a virtual token number which can be used by the user to make payments. The payment tokenisation would remove the need for a user to carry their credit card everywhere and convert their phone into a payment machine. A user can make a bill payment or shop online through this mechanism.

Making payments at contactless POS

In case of a contactless point-of-sale system, your phone (if it’s NFC-enabled) acts as your credit card. Similarly, even during online shopping, when payment through Google Pay is selected, the user will get the option of either paying through UPI or using the card that’s been added by the user. The user can even add multiple cards under the same Google Pay account.

User data protection

Data protection is also addressed, as the card information is replaced by the payment token generated by Google Pay. Beyond that, the token would be valid to that specific phone and users would need to re-configure each card if they have obtained a new device. This would ensure that duplication of the app on other devices would not serve the purpose of hackers. Google also allows for the removal of cards through the user's Google account in case of loss of card. This allows protection of customer data and minimises the chances of data breach or credit card frauds.


The facility of credit card payment through Google Pay has been launched for Android phones at present, but no time-frame has been specified to launch the same for iOS devices. The service is also limited to Visa cards from Axis Bank and SBI.

The way ahead

The tokenisation work by Google Pay is another important step as the world moves away from cash and takes steps towards digital modes of payment. This digital payment method is aimed at addressing customer concerns regarding data protection and promotes greater usage of digital modes of payment. The quantum of digital payments in India is expected to jump to Rs 4055 lakh crore by FY24 and this new step from Google will play a huge role in boosting the same.



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