 "Kiwi's report reveals surge in credit card adoption on UPI")
A recent report by Credit-on-UPI platform Kiwi has revealed a nationwide surge in virtual credit card adoption through UPI integration. Virtual credit card spending is growing at 15 per cent month-on-month.
What is Credit Cards on UPI
Credit Cards on UPI allow customers to link their credit cards to UPI apps for making payments to merchants. This provides a seamless, secure, and convenient way to use credit cards for digital transactions.
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What did the report say?
The report, titled ‘Credit Cards on UPI’, showcases the rapid growth of credit card payments on UPI. More than Rs 100 crore worth of Credit Card on UPI transactions are happening on Kiwi's platform monthly, with 75 per cent of these transactions occurring at small merchants. This trend underscores the widespread acceptance and utilisation of credit card payments through UPI.
According to RBI data (as of April 2024), there are about 320 million merchant acceptance touchpoints for UPI payments, far surpassing the nine million POS terminals available for credit card payments. This extensive network, combined with the convenience of UPI, has driven the rapid growth of ‘credit cards on UPI’ over the past year.
Adoption of credit card on UPI was highest among young adults
The report reveals that the adoption of ‘Credit Cards on UPI’ was highest among young adults below 40 (78 per cent of the users). Credit Cards on UPI have become the primary mode of payment, with users spending more than Rs 22,000 every month. The average number of transactions using credit cards on UPI is 21 per month, which is four times that of a traditional physical credit card.
The report also notes that the average transaction size for ‘Credit Cards on UPI’ users is Rs 1,125, significantly lower than traditional credit card transactions, which average around Rs 4,000. Additionally, the data showed that grocery and Kirana stores were frontrunners in embracing 'Credit Cards on UPI' (constituting 33 per cent of total usage), followed by apparel and electronics (15 per cent) and food and dining (7 per cent). The remaining 45 per cent of expenses are spread across e-commerce, travel, government services, fuel, pharmacies, etc.
Rupay Credit Cards’ market share has grown from 3 per cent in FY23 to 10 per cent in FY24, said Mohit Bedi, co-founder, Kiwi. “This success can be largely attributed to UPI’s success. Being a frontrunner in issuing Rupay credit cards, we at Kiwi are thrilled to see the swift adoption and usage of Rupay’s ‘Credit Cards on UPI’, especially for essential spending. The concept of virtual credit cards has picked up exponentially,” said Bedi. Nearly 20 out of every 100 credit cards being issued in the country are virtual credit cards, he said.
Key features of credit cards on UPI:
>Customers can link their RuPay credit cards to UPI apps like BHIM, PhonePe, Google Pay, Paytm, MobiKwik, etc
>Enables credit card payments at merchant outlets using QR codes
>Provides additional benefits like reward points on UPI spends.
>Secure transactions with UPI PIN authentication
How to link credit cards on UPI?
To link a credit card on UPI, customers need to select the ‘Link Credit Card’ option in the UPI app, enter the last six digits of the credit card and expiry date, and set a UPI PIN. Once linked, the credit card can be used to make payments by scanning merchant QR codes or entering the UPI ID.