India’s PhonePe launches Credit Line on UPI

By Gloria Mathias

PhonePe has announced the launch of Credit Line on UPI on its platform. Consumers who avail credit lines from their banks can now directly link these credit lines to UPI on PhonePe and seamlessly make merchant payments.

This feature enables consumers to make purchases with ease across millions of merchants and avail themselves of the flexibility of short-term credit, which helps them manage their monthly expenses better.

The Reserve Bank of India (RBI) recently expanded the scope of UPI to include pre-approved credit lines, called ‘Credit Line on UPI’. This allows consumers to avail of credit lines through banks and use them through their UPI apps. This will further help exponentially increase the number of merchants where credit lines can be utilised.

Along with consumers, the option also allows merchants on the PhonePe Payment Gateway (PG) to offer their customers an additional payment option at the time of checkout. This reduces friction and lowers purchaser cart abandonment, leading to higher sales. Merchants need to integrate with PhonePe PG to add ‘Credit Line on UPI’ as a payment option to enable this offering. Credit line on UPI rides on the same UPI rails that millions of Indians are familiar with.

Commenting on the launch, Deep Agrawal, Head of Payments at PhonePe, said, “We are excited to launch Credit Line on UPI on our platform. This is the second offering that will unlock the potential of credit usage on UPI, following the tremendous success of Rupay Credit Cards on UPI. We believe digital payments in India are growing from strength to strength, and PhonePe is committed to providing the most innovative and best-in-class solutions to our customers. This offering will revolutionise the access and use of credit in the country, and we are focused on offering a varied set of new use cases in close partnership with the ecosystem players.”