Google Pay Gamification (Product Management) — Startup Analytics

Tez now renamed Google Pay has been quite a successful application having clocked over 30 million transactions within 37 days of its initiation. I was though, late to the party having it installed only recently in July 2018.

Besides the cool UI and a very sleek experience, the most interesting aspect of the application is the rewards program where you get a shot at a certain amount of cash-back on making a transaction.

This rewards program has been of great intrigue given that it’s largely random and not many understand the nuances behind how the cash-back is computed for each transaction.

I have attached the sheet of all my transactions :

  • Transactions with non-zero rewards are coloured green.
  • The sole transaction in red is the one where the offer was deterministic, available on spending a specific amount on the FreshMenu application.
  • Transaction Value: The amount transacted through Google Pay.
  • CumTV: The Cumulative transactional value exchanged until then.
  • Reward: The corresponding cashback received.
  • CumR: Cumulative rewards earned till then.



So, if you want to know if you are up for a reward next you made a transaction is been a while. Transacting on consecutive days is likely to result in zero rewards.


Your cumulative reward(CumR) is a strong function of the cumulative transaction value (CumTV).


  • Time as a component solves lots of issues for them.
  • If you transact frequently, no need to incentivise you as they have already converted you.


This was one of the most interesting way for a firm to bring down the CAC or customer acquisition costs for their business. Even after ~2 years of usage, my cumulative sum of rewards is around Rs 500. Having checked around with a few of my friends, I have confirmed that their numbers at max range around 2000 bucks.

This was one of the most interesting ways to reduce the overall CAC costs by incentivising early users and tactically bringing the number down for late adopters. But these numbers are significantly lower than the CAC costs for other players like PayTm who definitely would have spent several multiple over this to not just acquire but retain customers through cashback offers.


This whole usage of expected value has been a great trick to engage the Indian audience. Many people don’t understand the concept of probability and that having a low probability and very high outcome is really a not so great deal at the end of the day.

This is evident by the proliferation of gaming startups. They rely on very few winners winning large sums of money similar to lottery/gambling. People bet and gamble eyeing the large prize money. Unlikely understanding that the odds are so low. On an expected basis, irrespective of their cricketing knowledge, they are expected to lose money on each bet. It’s a losing proposition by all means.

The idea introduced by Google Pay has now been completed adopted by other players. Additionally, everyone introducing probabilistic rewards instead of fixed amounts. You are likely to increase conversions and engagement with a 10% probability of 500 bucks among 100 users over 5 for each one of them.

A very obvious concept but just works wonders when put in practicality. The key lever being we are emotional beings at the end of the day. Moreover while logically both should be the same, the 500 possibility is sweeter in comparison to the certain 5.

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Startups & Analytics