The National Payments Corporation of India (NPCI) is seeing significant growth in the use of its Unified Payments Interface (UPI) credit feature, with monthly transactions now reaching approximately Rs 10,000 crore. This uptick is primarily driven by the integration of credit card features into the UPI platform, which allows users to link their credit cards to the app and consolidate payments into their monthly credit card bills.
Since the launch of the UPI credit card feature in November 2022, a growing number of lenders have begun offering these services, contributing to the surge in credit transactions. In addition to credit card transactions, the pre-sanctioned credit lines on UPI are also gaining popularity, with monthly disbursements reaching up to Rs 200 crore.
ICICI Bank has emerged as the leader in providing pre-sanctioned credit limits on UPI, with around half a dozen other banks also introducing this facility for their customers. This development coincides with rising concerns over the rapid growth in unsecured loans, including credit cards and personal loans.
UPI growth
UPI continues to be a widely used payment platform in India, recording 466 million transactions in July alone. The platform’s robust growth indicates its readiness for further expansion. Meanwhile, the introduction of the central bank digital currency (CBDC) is seen as a complementary development rather than a competitor to UPI. The CBDC is expected to bring additional features such as programmability, which could prove beneficial for various applications within India.
