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UPI-enabled credit cards emerge as go-to payment option in 2024, study shows

By Puja Sharma

January 22, 2025

  • BHIM UPI
  • Credit Access
  • Financial Inclusion
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~UPI-enabled Credit cards register 40 transactions per month on an average, 8x higher than traditional credit cards~

Rupay’s UPI-enabled credit cards are transforming the way Indians use credit, promoting accessibility and responsible spending. According to Kiwi, India’s credit-on-UPI platform, these cards have emerged as the essential payment instrument. The report was created to analyse emerging trends in credit card usage, note the impact of UPI integration on credit behaviour and the role of digital payments in driving financial inclusion across India.

India’s payments ecosystem has undergone a dramatic transformation with the rise of UPI-enabled credit cards, a trend highlighted in Kiwi’s 2024 report. These cards, which merge the unparalleled convenience of the Unified Payments Interface (UPI) with the benefits of credit, are reshaping consumer behaviour and fueling financial inclusion across the nation.

Since the Reserve Bank of India (RBI) approved UPI integration with NPCI’s Rupay credit cards in June 2022, the adoption of UPI-enabled credit cards has skyrocketed. In 2024, these cards have emerged as the preferred payment instrument, registering an average of 40 transactions per month—eight times higher than traditional credit cards. This unprecedented growth underscores the transformative impact of integrating digital payment systems with credit accessibility.

Driving Daily Spending and Financial Inclusion

One of the key highlights of UPI-enabled credit cards is their suitability for everyday transactions. With an average transaction size of ₹1,125—significantly lower than the ₹4,000 average for traditional credit cards—these cards are becoming the go-to payment option for small purchases. This shift benefits small merchants, with 75% of transactions occurring at local shops like grocery stores and kirana outlets.

This democratisation of credit usage extends far beyond urban centres. UPI’s vast network of 320 million merchant touchpoints dwarfs the reach of traditional credit card POS terminals, which number around 9 million. As a result, UPI-enabled credit cards are driving financial inclusion in both metro and non-metro cities. While Bengaluru leads in adoption among metro cities, non-metros like Pune, Ahmedabad, and Jaipur are also witnessing a surge in usage.

Youth at the Forefront

Young Indians have been enthusiastic adopters of UPI-enabled credit cards, with 45% of users under 30 years of age. This demographic is redefining credit usage, embracing the convenience of digital payments while fostering responsible spending habits. Another 30% of users fall within the 31-40 age bracket, indicating a broad-based appeal that spans multiple age groups.

A Virtual Revolution

The shift toward virtual credit cards has further accelerated the adoption of UPI-enabled credit. Kiwi’s report reveals that 50% of new credit cards issued in 2024 were virtual. These digital-first cards enhance security, provide seamless access, and align perfectly with the growing demand for contactless payments.

Rupay’s Rising Influence

Rupay’s UPI-enabled credit cards have played a pivotal role in this evolution, capturing 12% of the credit card market in 2024, up from just 3% in 2023. This remarkable growth reflects the increasing popularity of UPI-linked credit solutions among Indian consumers, driven by their ease of use, affordability, and accessibility.

Transforming India’s Credit Landscape

According to Kiwi Co-founder Mohit Bedi, UPI-enabled credit cards are not just a technological innovation—they are a catalyst for change in India’s payments ecosystem. By combining UPI’s ubiquitous acceptance with the power of credit, these cards are empowering individuals to adopt smarter financial practices.

This convergence of convenience, accessibility, and transparency marks a new era for India’s credit market, making responsible credit usage a reality for millions. As UPI-enabled credit cards continue to evolve, they are set to redefine the payments landscape, fostering financial inclusion and driving economic growth across the country.

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