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    HomeBusinessUPI transaction size to go up with credit card link

    UPI transaction size to go up with credit card link


    Money & Banking

    Surabhi | Mumbai, June 9 | Updated on: Jun 09, 2022

    Some fintech players already experimenting with credit on UPI products through wallets

    Even as the Reserve Bank of India has announced UPI linking to credit cards, a few companies such as Jupiter Edge and LazyPay are already offering products that offer credit on UPI through wallets.

    “There exist a few players in the market who are offering ‘credit on UPI’ through a wallet form factor. This has been enabled by RBI’s Master Directions regarding mandatory interoperability of full KYC PPIs (through UPI for wallet PPIs and through card networks for card-based PPIs) starting 2022-23,” said a report by Kotak Institutional Equities.

    Credit card linking model

    RBI’s announcement allowing UPI to be linked to credit cards will further boost this segment but fintech players are now waiting for the exact model for linking of UPI to credit cards.

    According to Kotak Institutional Equities., Jupiter Edge has partnered with LiquiLoans as the lending partner and LivQuik as the PPI issuer. It offers a maximum credit of ₹20,000 and an interest free period of 15 days for UPI on credit.

    LazyPay has collaborated with PayU Finance for a similar product. It offers a credit limit fo ₹1 lakh with a 15-day interest free period as well as cashbacks.

    “The acceptance infrastructure for credit cards can dramatically increase as merchants will be able accept credit card payments over their UPI accounts.r Our corporate card customers have requested for the ability to link their cards to UPI to be able to make all kinds of payments related to their company expenses seamlessly,” said Deepti Sanghi, co founder and CEO, Kodo.

    The RBI had on June 8 proposed linking of credit cards to UPI, starting with Rupay cards.

    “It will not only accelerate digital transactions but will also affect the average ticket size of the transaction. At present, the average ticket size is ₹1,600 per transaction while that of a credit card is around ₹4,000. So, now with this development, the UPI ticket size is likely to go up somewhere around ₹3,000 to ₹4,000,” said Mandar Agashe, Founder and MD, Sarvatra Technologies.

    Published on June 09, 2022

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