Earlier there was a time when we used to use cash everywhere, and today we find UPI Scanner everywhere, at every shop, today we Indians have become very dependent on UPI. Today, we do almost every small to big payment through UPI.
Now these UPI Payments Apps have made payment as convenient for us, have you ever wondered how these Apps like Google Pay, Phonepe and Paytm earn money? Now if we see directly, we do not see any such way from outside by which these apps earn money. Now it is obvious that these third-party apps earn money, that’s why they exist till now, so in this article, we will know in detail that How Does Google Pay and other UPI Apps Make Money?
Now we all know very well that the online payment system has completely changed with the Advent of UPI. These UPI Apps have not only made our online payment easy, but they also give us cashback as Rewards from time to time. Now by looking at their cashback processor, you can guess that these UPI Apps do earn something or the other. Now how do these apps earn and in which ways do they earn, today we will know about all of them in this article.
How Does Google Pay Make Money?
In today’s digital age, payment apps have revolutionized the way we transact and manage our finances. Google Pay, one of the leading players in the market, offers a seamless and convenient platform for making payments, sending money, and storing loyalty cards. While users often wonder how such services are provided for free, it is essential to understand the revenue generation model behind Google Pay.
Google Pay usually earns money in 6 ways-
- Merchant Payments
One of the primary revenue streams for Google Pay is merchant payments. When customers use Google Pay to make purchases at physical or online stores, a small fee called the Merchant Discount Rate (MDR) is charged to merchants. The MDR is typically a percentage of the transaction value and covers the costs associated with payment processing and infrastructure. Google Pay collaborates with acquiring banks and payment processors to share this fee, allowing merchants to accept payments seamlessly while generating revenue for the platform. All UPI payment apps charge a small fee from merchants for accepting payments through their platform.
- Advertising and Promotions
Google Pay leverages its extensive user base and transaction data to offer targeted advertising and promotional campaigns to businesses. By providing insights into user behavior, spending patterns, and preferences, Google Pay can deliver personalized advertisements within the app or run promotional campaigns. These advertisements can range from sponsored offers from partnered merchants to recommendations tailored to individual users. Businesses pay Google Pay to feature their advertisements and leverage the platform’s reach and engagement to attract customers.
- Google Services Integration
Google Pay is integrated with various Google services, such as the Google Play Store. Users can make in-app purchases, buy digital content, or subscribe to services using Google Pay. In these instances, Google Pay earns a percentage of the revenue generated from these transactions. Just like other app stores, Google Pay benefits from facilitating the payment process and contributing to the overall revenue generated within the ecosystem.
- Peer-to-Peer (P2P) Transactions
While peer-to-peer transactions are typically free for users, Google Pay may introduce certain fees in specific scenarios. For instance, if users choose to transfer money using a credit card instead of a bank account, Google Pay may charge a convenience fee. Additionally, charges may apply for instant transfers or expedited disbursements. By implementing these fees, Google Pay can generate revenue from P2P transactions while offering value-added services to users who require additional convenience or speed.
- Partnerships and Tie-ups
Google Pay has a partnership with many different types of businesses in which Google Pay promotes their services and products. These partnerships can be revenue-sharing arrangements where the payment app receives a percentage of the sales generated through referrals or collaborations. These partnerships may span industries such as travel, food delivery, e-commerce and more. By leveraging its user base and transaction data, Google Pay can drive customer acquisition for partner businesses, leading to revenue generation through mutually beneficial relationships.
- Data Monetization
UPI payment apps collect vast amounts of user data including transaction history, spending patterns and preferences. This data can be anonymized and analyzed to gain important insights for businesses, market research firms, or advertisers. Payment apps can monetize this data by providing insights or by selling aggregated data to third parties. Advertisers can leverage this information to deliver more targeted campaigns, while businesses can gain valuable insights into consumer behavior to enhance their offerings and strategies
How do all UPI apps make money?
In these UPI Apps, we can pay all types of bills ranging from Electricity Bill, but still these apps do not charge any platform fees from us, nor do they charge any extra money. For example, if we do a recharge of Rs.199 through these apps, then we have to pay only Rs.199 for this. Now in this situation, we do not see any benefit of these apps directly, but these UPI Payment Apps earn money through commission.
This means that when you pay your electricity bill, insurance or DTH bill through these UPI apps, the apps get a commission for these transactions. The biggest benefit of these UPI apps is from mobile recharge because today everyone can do their recharge from home with the help of these UPI apps.
Along with this, when we do a lot of purchasing from these UPI apps, we are also provided with some coupon codes which we use for online shopping. These UPI apps get commission even if these coupon codes are used by us.
Now the second biggest income source of these UPI apps is advertisement. When you open these UPI apps and the ads you see at the top, they take money for these ads too. Even from this these apps earn huge money.
Hopefully, with the help of this article, you will be able to understand that by what means all UPI apps earn money? Although these UPI apps do not take any kind of charge from their users, but their income source is very high, due to which it generates a lot of revenue. If you find this information beneficial then do share it.