HDFC Bank and ICICI Bank are in rollout mode, as other banks work on similar products. Existing BNPL fintechs will need to further rethink their business models, say experts
Credit on UPI essentially means besides credit cards, banks, which have fully approved, pre-sanctioned, credit lines available towards a large number of customers, can offer these lines at an interest rate based on the credit limit utilised and the historical customer spending behaviour.
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India’s largest private sector banks—HDFC Bank and ICICI Bank—are working on products as part of the credit on Unified Payments Interface (UPI) programme. After a go-ahead to launch such products from the Reserve Bank of India (RBI) this month, this is one more step to leverage on the success of public digital infrastructure.
And if bank customers do adopt it, it could get pure buy-now-pay-later (BNPL) fintechs and even credit card companies to further rethink their business models and products, to ensure customer stickiness and relevance, after a regulatory crackdown in 2022.