Credit transactions on UPI reaching Rs 10K cr every month: NPCI chief

Credit transactions on India's flagship payments platform Unified Payments Interface (UPI) are reaching Rs 10,000 crore each month, of which approximately Rs 100-200 crore is from the “credit line on UPI” facility, while the remainder comes from the RuPay credit card on UPI facility, according to Dilip Asbe, managing director and chief executive officer (MD&CEO) of the National Payments Corporation of India (NPCI).

“Credit on UPI gets about Rs 10,000 crore in transaction value, and Rs 100-200 crore comes from the credit line on UPI. ICICI Bank is one of the leading banks offering credit on UPI, with other five to six lenders live on the platform,” Asbe said on the sidelines of the curtain-raiser for this year’s Global Fintech Fest (GFF), scheduled for August 28-30 in Mumbai.

NPCI’s “credit line on UPI”, launched last year, offers 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) are live with this facility. Among the apps, BHIM, Google Pay, Paytm, PayZapp, Navi, and Tata Neu are live on this product offering.

Credit line on UPI was off to a slow start since NPCI has not yet defined the interchange fee for this facility. It is expected to announce the interchange this year, with it ranging from 1 per cent to 1.2 per cent per transaction, Business Standard reported in April.

Launched in 2022, RuPay Credit Cards on UPI provide a seamless, digitally enabled credit card lifecycle experience for the customers, who benefit from the increased opportunity to use their credit cards. And, merchants benefit from the increase in consumption by being part of the credit ecosystem with acceptance of credit cards using asset lite QR codes.

Currently, as many as 16 banks are facilitating this product, including PNB, Union Bank, Indian bank, HDFC Bank, Canara Bank, Axis Bank, Kotak Mahindra Bank, and ICICI Bank. And, BHIM, PhonePe, Google Pay, PayZapp, Slice, Paytm, MobiKwik, Groww, Cred, ICICIiMobile, Amazon Pay, and Jio Finance are among the many apps that are providing this facility to customers.

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, in a post on X (formerly Twitter), wrote: “The recent introduction of credit on UPI within the ecosystem has the potential to be a game-changer in enabling access to credit for millions.”

“Credit on UPI will help 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 being 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.