Zeta Unveils Credit-As-A-Service Product on UPI, Targets 50% Market Share

Fintech unicorn Zeta has launched a digital credit-as-a-service product on the United Payments Interface (UPI), primarily for banks. Zeta estimates that the transaction volume on this scheme will exceed $1 trillion by 2030 and aims to capture 50 per cent of this market opportunity. 

The product is based on the credit lines on the UPI scheme, which was introduced by the Reserve Bank of India in September. The main purpose behind it was the lowering financial service costs and enabling customers to receive credit that has been pre-approved through accounts linked to UPI. The RBI said, "Under this facility, payments through a pre-sanctioned credit line issued by a Scheduled Commercial Bank to individuals, with the prior consent of the individual customer, are enabled for transactions using the UPI System."

Calling the Credit Line on UPI “a credit distribution superhighway," Ramki Gaddipati, CEO APAC & Global CTO, Zeta, said, “By delivering credit at the point of need, the Credit Line on UPI has hit a home run for banks by completely changing the discovery, access, and cost mechanics of retail lending.” 

Gaddipati highlighted the need for the banking ecosystem to prepare for hockey-stick growth in credit lines on UPI, similar to what India experienced when UPI was first launched.

Sounding a note of caution on banks’ preparedness for Credit Line on UPI volumes, he added, “We saw UPI volumes put a strain on core banking systems. We anticipate similar volumes on Credit Line on UPI before long, and this calls for population-scale banking infrastructure capable of processing 100s of millions of credit accounts. We have pre-architected our solution for this from Day 1.” 

India's payment digitisation objectives have been met by developing products and features that make use of the UPI system. The UPI market in the country is vast, with over 300 million people utilizing the payment mechanism and over 11 billion UPI payments made each month. Fintech companies are also optimistic about the growth of Unified Payments Interface (UPI) credit lines, as per a report by BusinessLine. The report says that companies like Jupiter, EaseBuzz, and PayU are placing bets on providing users with a UPI payment experience akin to that of a credit card.