ICICI Bank and PhonePe announced a strategic tie-up for offering credit lines on Unified Payments Interface (UPI) to the customers of PhonePe. Based on this collaboration, the pre-approved users of the PhonePe application will get a short-term credit of ₹2 lakh and are expected to repay the amount within 45 days.
This collaboration is at a very crucial time for the reason that PhonePe enjoys a very strong holding in the UPI landscape with nearly 49% market share, with a monthly transaction value of almost ₹200 crores, which can be considered much bigger than the closest competitor to this platform, Google Pay, that handles approximately 38% of total UPI transaction volumes in India.
About this, Deep Agrawal, Head of Payments, PhonePe, said: “The credit line on UPI is an innovative solution that’s transforming access to credit in the country. At PhonePe, we aim to increase its reach and accessibility and partnership with ICICI Bank forms a significant landmark for us.”
This marks the first collaboration of PhonePe with a bank for launching a credit line product in the market. That goes to reflect the emphasis on developing the financial potential of the user base. With the festivals around the corner, Niraj Tralshawala, Head of Product at Payment Solutions for ICICI Bank, averred, “Pre-approved customers can activate the credit line immediately so they will be able to make flawless payments for their festive needs and wishes on PhonePe.”. This product is expected to significantly enhance the personal banking experience for our customers, according to National Payments Corporation of India (NPCI). This came when the company initiated the credit line on UPI service last year, focusing on low-ticket, high-volume retail loans to individuals and small businesses. Besides ICICI Bank, this facility has been offered by several other lenders, which also include Axis Bank, HDFC Bank, Indian Bank, PNB, and SBI. Also, Bharat Interface for Money, Google Pay, Paytm, PayZapp, Navi, and Tata Neu have taken up the product offering.
The collaboration by ICICI Bank with PhonePe is significant not only because of the increasing interlinking of credit facilities under digital payment platforms but also marks a more general trend in the direction of increasing financial inclusion through innovative technology-driven solutions in India’s banking landscape.
