Sachin Bansal-led fintech firm Navi has launched Credit Line on UPI in partnership with Mangaluru-based Karnataka Bank.
The CL on UPI was launched by the National Payments Corporation of India (NPCI) last year but the feature has to be activated for customers by their account holding bank.
The private sector lender will activate pre-approved or pre-qualified credit for its customers who are registered on Navi. Currently, the product is offered to a select few users and will be rolled out to a wider set of customers after user feedback.
UPI is the most popular real-time mobile payment system in the country, cornering 80 percent of all digital transactions.
In the beginning, Karnataka Bank will start with a short-term monthly loan product and will likely offer other digital unsecured credit variants such as EMI facilities and working capital credit lines among other things.
“The product provides freedom to credit access and is expected to revolutionise how people pay without cards through UPI. This strategic engagement with Navi will create significant synergies and the digital offering is a unique and superior experience to all UPI users,” said Srikrishnan H, managing director and CEO of Karnataka Bank.
According to the bank, integrating a credit line directly into the UPI ecosystem will make it easier for customers to access credit securely and conveniently. It added that CL also offers flexibility and ease of use that UPI provides.
“CL on UPI will change the way millions of Indians engage with UPI. We believe that by leveraging the widespread reach and real-time capabilities of UPI, CL on UPI offering will become the future of credit,” said Sachin Bansal, managing director and CEO, Navi Technologies.
Bansal added that the product also enables millions of underbanked and underserved consumers to access credit seamlessly.
Navi has registered blistering growth on the UPI platform, almost doubling the number of transactions done through the app, according to data available on NPCI. The app is already the sixth-largest UPI app.
Navi reported 68.5 million transactions in July, up from 35.7 million in the previous month. In March, the number was only 3 million, a 22 times growth in just four months.
NPCI is expected to announce 1.2 percent interchange on CL on UPI. The lack of a specific revenue model has prevented the banks and UPI apps from actively acquiring customers for the product.
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