Future of UPI is credit-driven, not debit-driven, says Navi founder Sachin Bansal

Sachin Bansal, Navi

Sachin Bansal, founder of fintech firm Navi said that UPI will eventually become credit-driven rather than debit-driven.

“The future of UPI is not debit. A significant part of UPI transactions will be powered by credit, not direct bank transfers. Payments will increasingly be made using a credit product, earning rewards and other benefits,” Bansal said during a fireside chat at an event organised by consultancy firm Redseer in Bengaluru.

His remarks come at a time when India’s digital payments landscape is undergoing a transformation, with players like Rupay Credit on UPI seeing rapid adoption. According to Bansal, Rupay credit cards now account for 60% of all credit card spends in India, with 90% of those transactions happening on UPI.

Bansal's words come in just a few week after he resigned as the CEO of Navi and will continue in the capacity of Executive Chairman of the Navi Group.

Navi’s entry into UPI was initially met with skepticism, given the dominance of PhonePe, Google Pay, and Paytm. However, Bansal’s firm quickly climbed to become the fourth-largest player in November of 2024.

Also Read: Sachin Bansal's Navi overtakes Cred to emerge as fourth largest UPI app

Navi has also been expanding its lending business aggressively. With a loan book of Rs 11,000 crore, Bansal acknowledges the need for a balance between secured and unsecured lending as the company scales.

"If we are handling lakhs of crores in loans in the future, there's no way we can have 90% of our portfolio as unsecured it would be too risky. Over time, I see secured lending growing to 50% of our portfolio," he said.

Despite Navi’s success in payments and lending, the company has faced regulatory challenges. Its attempt to secure a banking licence was rejected by the RBI, forcing it to recalibrate its strategy.

Also Read: Navi failed to keep its promises to RBI, forcing regulatory action

However, Bansal believes that Navi is now well-positioned for growth, having weathered market cycles, navigated regulatory stress, and built strong risk management capabilities.

With profitability on the rise, Navi is now considering an IPO to fund its next phase of growth.

"We have ticked most of the boxes in the last six years. Now, it's time to accelerate," Bansal said.