PhonePe and Utkarsh Small Finance Bank Launch FD-Backed 'Wish Credit Card' for Wider Access

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AuthorWhalesbook News Team|Published at:
PhonePe and Utkarsh Small Finance Bank Launch FD-Backed 'Wish Credit Card' for Wider Access
Overview

PhonePe has partnered with Utkarsh Small Finance Bank to launch the 'Wish Credit Card', available through online applications on the PhonePe app. This RuPay credit card targets users in tier-2/3 cities and first-time credit applicants. It's secured by a Fixed Deposit (FD) starting at ₹2,000, which earns interest, and offers reward points on various transactions, aiming to improve credit accessibility and history building.

PhonePe, a leading digital payments platform, has joined forces with Utkarsh Small Finance Bank to introduce the 'Wish Credit Card'. This new credit card product will be entirely accessible via online applications directly through the PhonePe application.

The primary aim of this collaboration is to extend credit access to a broader audience, specifically targeting individuals residing in tier-2 and tier-3 cities, as well as those who are applying for a credit card for the first time. This initiative seeks to bridge the gap in credit availability for these demographics.

The 'Wish Credit Card' operates on a secured credit model, backed by a Fixed Deposit (FD). Cardholders can initiate with an FD as low as ₹2,000. This deposit serves as collateral for the credit limit assigned and also accrues interest for the cardholder.

Issued as a RuPay credit card, the 'Wish Credit Card' supports UPI payments and provides reward points on select transactions. Key benefits include:

  • 3% reward points on monthly recharge and bill payments made via the PhonePe app.
  • 1% reward points on Scan & Pay transactions and specific e-commerce purchases.
  • An additional 200 bonus reward points monthly for spending ₹15,000.

Reward points can be redeemed at a value of 1 point equalling ₹1.

The entire application process is designed to be digital and is integrated seamlessly into the PhonePe app. The rollout of the card will occur in phases.

Impact: This partnership could significantly enhance financial inclusion in India by providing credit access to underserved segments. It may lead to increased transaction volumes for PhonePe and Utkarsh Small Finance Bank, and contribute to a larger user base for RuPay cards. It also empowers individuals to build their credit history through a secure mechanism.
Impact Rating: 7/10

Difficult Terms:

  • Fixed Deposit (FD): A financial instrument where an individual deposits money with a bank for a specified period, earning a fixed interest rate.
  • RuPay: India's domestic card network, enabling debit, credit, and prepaid card transactions.
  • UPI (Unified Payments Interface): A real-time payment system facilitating instant money transfers between bank accounts on mobile devices.
  • Tier-2 and Tier-3 Cities: Cities in India ranked below major metropolitan centers (Tier-1) based on population and economic activity.
  • Credit History: A record of an individual's past borrowing and repayment behavior, used by lenders to assess creditworthiness.
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