Credit transactions on India’s Unified Payments Interface (UPI) are reaching Rs 10,000 crore monthly, with Rs 100-200 crore from the “credit line on UPI” facility and the remainder from the RuPay credit card on UPI, according to Dilip Asbe, MD&CEO of the National Payments Corporation of India (NPCI).
“Credit on UPI gets about Rs 10,000 crore in transaction value, with Rs 100-200 crore from the credit line on UPI. ICICI Bank is a leading provider, along with five to six other lenders,” Asbe said at the curtain-raiser for the Global Fintech Fest (GFF), scheduled for August 28-30 in Mumbai.
NPCI’s “credit line on UPI,” launched last year, provides low-ticket, high-volume retail loans to individuals and businesses. Currently, Axis Bank, HDFC Bank, ICICI Bank, Indian Bank, Punjab National Bank (PNB), and State Bank of India (SBI) offer this facility. Apps like BHIM, Google Pay, Paytm, PayZapp, Navi, and Tata Neu support this product.
The credit line on UPI had a slow start as NPCI has not yet defined the interchange fee. Expected to be announced this year, the fee may range from 1% to 1.2% per transaction, according to Business Standard.
Launched in 2022, RuPay Credit Cards on UPI offer a seamless, digitally enabled credit card experience, enhancing usage opportunities for customers. Merchants benefit from increased consumption by accepting credit cards via asset-lite QR codes.
Currently, 16 banks, including PNB, Union Bank, Indian Bank, HDFC Bank, Canara Bank, Axis Bank, Kotak Mahindra Bank, and ICICI Bank, facilitate this product. Apps like BHIM, PhonePe, Google Pay, PayZapp, Slice, Paytm, MobiKwik, Groww, Cred, ICICI iMobile, Amazon Pay, and Jio Finance support this facility.
Experts believe credit on UPI is a game-changer because it has the potential to provide seamless access to credit to millions, making credit more convenient and affordable.
Recently, Sachin Bansal, chairman and CEO of Navi, posted on X (formerly Twitter): “The introduction of credit on UPI has the potential to be a game-changer, enabling access to credit for millions.”
“Credit on UPI will create new types of credit lines and EMI options based on spending patterns, making access to credit more convenient and affordable,” he added.
GFF 2024 is presented by the Ministry of Electronics and Information Technology (MeitY), Ministry of External Affairs, Department of Financial Services (DFS), the Reserve Bank of India (RBI), and International Financial Services Centres Authority (IFSCA).
Meanwhile, G Padmanabhan, former executive director of RBI and member of GFF 2024 Advisory Council, said there is probably a trust deficit between the regulators and fintechs. And, how fintechs embrace regulations is going to be one of the things that they will discuss in the GFF this year, he said.