PhonePe Launches ‘Credit Line on UPI’ for Easier Payments
New Delhi [India], August 22: PhonePe has announced a new feature called ‘Credit Line on UPI,’ designed to make transactions more flexible and convenient for users. This feature allows consumers to link their bank credit lines to the Unified Payments Interface (UPI) on the PhonePe platform, enabling seamless merchant payments.
The Reserve Bank of India (RBI) recently expanded the scope of UPI to include pre-approved credit lines, paving the way for this new feature. Known as ‘Credit Line on UPI,’ this innovation allows consumers to use their credit lines through UPI apps, increasing the number of merchants where credit lines can be utilized. This aims to facilitate smoother transactions and greater accessibility for both consumers and merchants.
The introduction of ‘Credit Line on UPI’ enhances the payment experience by allowing consumers to make purchases across millions of merchants with ease. By integrating their credit lines into UPI, users can now manage their monthly expenses more efficiently through short-term credit options. The feature is expected to simplify transactions and offer greater financial flexibility to users.
For merchants using the PhonePe Payment Gateway (PG), the new option provides an additional payment method at checkout. This integration not only reduces transaction friction but also helps lower cart abandonment rates, leading to higher sales for businesses. Merchants can easily incorporate the ‘Credit Line on UPI’ payment option by integrating with PhonePe PG, thereby expanding their payment acceptance capabilities.
Deep Agrawal, Head of Payments at PhonePe, expressed enthusiasm about the launch, stating, “We are excited to launch Credit Line on UPI on our platform. This is the second offering that will unlock the potential of credit usage on UPI, following the tremendous success of Rupay Credit Cards on UPI.” He added, “We believe digital payments in India is growing strength to strength and PhonePe is committed to providing the most innovative and best-in-class solutions to our customers. This offering will revolutionize the access and use of credit in the country and we are focussed on offering a varied set of new use cases in close partnership with the ecosystem players.”
Users can easily link their credit lines to UPI on the PhonePe app by following these steps:
- Navigate to the profile section on the top left of the PhonePe app home page and select the bank from which the credit line was availed.
- Link the credit line associated with the registered phone number by selecting the bank.
- Set a UPI PIN to complete the linking process.
Once linked, the Credit Line option will appear as a payment instrument on the payment page during transactions.
Doubts Revealed
PhonePe -: PhonePe is a popular app in India that people use to send money, pay bills, and do other financial transactions using their mobile phones.
Credit Line on UPI -: A ‘Credit Line on UPI’ means you can borrow money from your bank and use it to pay for things through the UPI system, which is a way to transfer money instantly between bank accounts using your phone.
UPI -: UPI stands for Unified Payments Interface. It’s a system in India that allows you to transfer money between bank accounts instantly using your mobile phone.
Reserve Bank of India -: The Reserve Bank of India (RBI) is the central bank of India. It controls the money supply and interest rates in the country to keep the economy stable.
Deep Agrawal -: Deep Agrawal is a person who works at PhonePe and is in charge of the payments section. He talks about how this new feature can make paying for things easier.
merchant payments -: Merchant payments are payments made to businesses or shops when you buy something from them.
transaction friction -: Transaction friction means any difficulty or delay that happens when you are trying to pay for something. Reducing friction makes payments faster and easier.
