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BharatPe Introduces Credit-on-UPI Service with YES Bank
BharatPe, a prominent Indian fintech company, has launched an innovative credit-on-UPI product named ‘Pay Later with BharatPe.’ This new offering, developed in partnership with YES Bank and powered by the National Payments Corporation of India (NPCI) through the UPI infrastructure, aims to significantly expand access to short-term digital credit. The service targets both consumers and merchants across India, enabling seamless credit transactions via the widely adopted Unified Payments Interface.
The ‘Pay Later with BharatPe’ product allows users to make payments using a pre-approved credit line across all UPI merchant touchpoints. This includes scanning any UPI QR code, facilitating online shopping, settling utility bills, and completing mobile and DTH recharges directly through the BharatPe application. The move underscores BharatPe's strategy to enhance financial inclusion by providing accessible credit solutions in the digital payments ecosystem.
Addressing Credit Gaps in India
According to BharatPe’s Chief Executive Officer, Nalin Negi, credit penetration in India remains notably limited, especially for small merchants and individuals who are often first-time borrowers. He stated that ‘Pay Later with BharatPe’ represents a substantial opportunity to deliver a credit solution that is compliant, scalable, and conveniently addresses the spending needs of both merchants and consumers. This initiative seeks to bridge the gap by offering a readily available credit facility.
The service emphasizes convenience and speed, providing instant UPI-linked credit with no extensive paperwork or delays. Users are empowered to spend throughout the month and repay their dues on a monthly basis, offering significant flexibility in financial management.
Flexible Repayment and Interest-Free Periods
‘Pay Later with BharatPe’ offers users the ability to spend now and repay later, with options for full monthly repayment or flexible Equated Monthly Installments (EMIs) ranging from three to twelve months. A key attractive feature is the provision of up to 45 days of interest-free credit. Credit limits are refreshed upon successful repayment, ensuring that users can rely on the facility for ongoing needs.
The BharatPe application provides users with a clear overview of their transaction history, available credit limits, upcoming repayments, and EMI schedules. All repayment processes are secured through the UPI platform, ensuring a safe and reliable user experience.
Strategic Banking Collaboration
The partnership with YES Bank brings significant banking and technological expertise to the venture. Anil Singh, country head for credit cards and merchant acquiring at YES Bank, highlighted the bank's commitment to leveraging its advanced digital onboarding and underwriting capabilities. These capabilities are expected to effectively serve customers acquired through the BharatPe platform and potentially extend to a broader market. The integration leverages the robust and interoperable UPI network managed by NPCI.
Integrated Rewards Program
Adding further value for its users, BharatPe has integrated its UPI Rewards program into the ‘Pay Later’ offering. Users who conduct transactions through the BharatPe UPI app will earn guaranteed rewards in the form of Zillion coins. These coins can be redeemed for various benefits, including brand vouchers, exclusive products, or can be utilized to pay utility bills, enhancing the overall utility and appeal of the service.
Impact
The introduction of ‘Pay Later with BharatPe’ is expected to foster greater adoption of digital credit among a wider segment of the Indian population. It could stimulate consumer spending and provide small businesses with a crucial short-term financing tool. This move intensifies competition in the burgeoning fintech lending space and highlights the growing trend of embedded finance solutions integrated into payment platforms. For consumers, it offers a convenient and accessible way to manage immediate expenses.
Impact Rating: 7/10
Difficult Terms Explained
- Credit-on-UPI: A payment method allowing users to transact using a pre-approved credit line linked directly to their UPI account.
- UPI (Unified Payments Interface): An instant real-time payment system developed by NPCI that facilitates seamless fund transfers between bank accounts via mobile devices.
- NPCI (National Payments Corporation of India): The principal organization for operating retail payment and settlement systems in India, set up by the Reserve Bank of India and Indian Banks' Association.
- Fintech: Abbreviation for financial technology; refers to companies and services that use technology to innovate and improve financial services.
- Merchants: Businesses or individuals who accept payment for goods or services.
- Consumers: Individuals who purchase goods or services for personal use.
- EMIs (Equated Monthly Installments): Fixed monthly payments made by a borrower to a lender for a loan, comprising both principal and interest.
- Credit Penetration: The measure of how widely credit facilities are available and utilized within an economy by individuals and businesses.
- Digital Onboarding: The process of registering or opening an account for a service entirely online, without physical documentation or visits.
- Underwriting: The process by which financial institutions assess the risk of lending money or insuring a client, determining terms and conditions.