Credit line on UPI to ensure business sustainability, says Google Pay VP

In a significant development for the Unified Payment Interface (UPI) space, companies integrating credit lines and loan access through UPI platforms are establishing a sustainable business model. Ambarish Kenghe, Vice President of Google Pay, emphasized the importance of this integration. Presently, regular UPI transactions are not charged, but merchants bear a 1.1% Merchant Discount Rate (MDR) for payments above Rs 2,000 through wallets, credit cards, and debit cards. However, there are inherent costs associated with infrastructure, marketing, and manpower for facilitating these transactions.

Kenghe highlighted the need for self-sustainability in the industry, stating that without it, there could be significant future costs. With the inclusion of RuPay and credit cards in UPI transactions and the application of MDRs, the UPI model is now showing signs of sustainability. Google Pay recently announced merchant and personal credit offerings on its app. These offerings include sachet loans starting from Rs 15,000 for merchants, with simplified repayment options in partnership with DMI Finance. Additionally, Google Pay introduced credit lines for merchants in collaboration with ePayLater, addressing their working capital needs. Furthermore, the company expanded its personal loan portfolio in partnership with Axis Bank. Following the National Payments Corporation of India’s recent announcement, Google Pay will enable consumers to access credit lines from banks on UPI for making payments through the app.