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Poosarla Sai Karthik
Tech guy with a busi... • 2d
UPI on Credit? PhonePe’s Boldest Bet Yet In partnership with HDFC Bank and NPCI, the card is powered by Rupay and allows UPI payments through credit. NPCI had enabled this back in 2022, but PhonePe had to wait almost ten months to get RBI approval. With over 150 million active users, and handling nearly half of all UPI transactions in both volume and value, this move helps PhonePe strengthen its dominance in digital payments. More importantly, it adds a fresh revenue stream at a time when most of its five thousand crore rupee revenue still comes from payments. Insurance and other products have not scaled, but lending is clearly the new focus. Many users are already being nudged towards loans inside the app. This card helps on multiple fronts. For HDFC Bank, it opens access to PhonePe’s massive user base. For PhonePe, it increases user stickiness and repeat usage. For NPCI, it is a chance to boost Rupay’s credit card market share, which was only 15 percent in 2024. If PhonePe could help UPI scale, maybe it can do the same for Rupay credit cards. But the value proposition has to be clear. The PhonePe Ultimo card charges 999 rupees annually and offers 10 percent reward points, but only for in app spends like bill payments. Payments made using PhonePe on other platforms do not qualify. That makes it slightly less attractive than the ICICI Amazon or Swiggy HDFC cards which offer simple cashback. However, those cannot be used for UPI because they are not on Rupay. That gives PhonePe a unique advantage. This card is more than just a product. It sets up PhonePe for its IPO, strengthens its lending push, and supports NPCI’s long term goals. The only question is whether users will find it valuable enough to make it succeed.
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