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Business Operations Business Models

How Does Google Pay Make Money (Business and Revenue Model)

The Google Pay business model

Google Pay logo
Here’s what you should know:
  • What is Google Pay, and how does Google Pay work?
  • How does Google Pay make money?
  • Commissions from Transactions
  • Google Pay profit and revenue
  • What is the Google Pay business and revenue model?
  • Google Pay funding, net worth, and market cap
  • Google Pay subsidiaries, acquisitions, and exits

How does Google Pay make money and how is it free to use? Well, here is a full, in depth, breakdown of their main revenue stream and services they offer, as well as the Google Pay business and revenue model, how much Google Pay makes per year, and how Google Pay works.

What is Google Pay, and how does Google Pay work?

Google Pay is a mobile payment service offered by Google that allows Android users to make in-person, cashless, and cardless payments through their mobile phones, tablets, or watches – in stores, online, and in apps.

Developed and released in 2011 by Google, Google Pay has since handled more than 2.5 billion transactions, with an annual run rate of over $110 billion USD in transactional value for more than 150 million users worldwide using its cashless payment service.

So, how does Google Pay work? To get started with using Google Pay, you need to first download the app from the Google Play store.

Once you’ve downloaded it, open it and tap “Payment” on the bottom and then “+ Payment method” to add a debit card, credit card, or PayPal account.

After you’re all set up, you can then start using Google Pay to make purchases in stores, online, and in apps. Please note, that you do need an eligible Android phone to use Google Pay and Android Lollipop (5.0) or higher to pay in stores.

Some of Google Pay’s competitors include PayPal, Cash App, Zelle, Venmo, Apple Pay, Western Union, Skrill, TransferWise, and other payment services.

Google Pay App in Apple App Store | Google Pay Business Model | How Does Google Pay Make Money | How Does Google Pay Work
Source: Apple App Store | Google Pay

How does Google Pay make money?

According to Google’s latest RTP report, Google Pay has handled more than 2.5 billion transactions, with an annual run rate of over $110 billion USD in transactional value.

So how does Google Pay make money off of all those transactions and transactional value?

Below is a breakdown of how much money Google Pay makes and its revenue model. Including their main revenue stream and how much they charge for their services.

Here is how Google Pay makes money in 2022

Google Pay has a revenue model that makes money in just one (1) way; commissions from service provider transactions.

#1. Commissions from Transactions

Google Pay makes all of its money through the fees they collect from service providers (merchants) on each transaction using Google Pay.

How does Google Pay make money from transactions? Google Pay makes money whenever a Google Pay user makes a bill payment or mobile recharge transaction to service providers (merchants).

As noted above, Google Pay has handled more than 2.5 billion transactions, with an annual run rate of over $110 billion USD in transactional value. Of which, Google Pay takes a commission on all of it. Although it’s unclear how much they collect from each transaction.

Note: Google Pay makes money on bill payments and mobile recharge transactions.

Google Pay profit and revenue

In 2021, Google reported $257.63 billion in revenue. It’s unclear what percentage Google Pay makes up of this.

Note: Because Alphabet Inc. (Google), the developer of Google Pay, is a publicly traded company, under the Securities Exchange Act of 1934, they must file continuous financial filings with the U.S. Securities and Exchange Commission (SEC). You can find all of Google’s publicly released financial reports, including annual reports, through Google’s investor section on their website.

What is the Google Pay business and revenue model?

Google Pay makes money through a few revenue models that they combine within their company, they are:

  • Fee for service (FFS) business model
  • Business to business (B2B) business model
  • B2B2C (partnerships) business model

Google Pay funding, net worth, and market cap

According to Google’s Crunchbase profile, Google, the developer of Google Pay, has raised $36.1 million over 4 rounds and has a market cap of $628.2 billion as of July 2022.

Google Pay subsidiaries, acquisitions, and exits

To date, Alphabet Inc. (Google), the developer of Google Pay, has made a total of 248 acquisitions, 142 investments, 66 lead investments, and 35 successful exits.