UPI Integration Spurs Growth In Rupay Credit Cards, Says Kiwi Report
75 per cent of all 'Credit Cards on UPI’ transactions are happening at small merchants
More than Rs 100 crore worth of Credit Card on UPI transactions are happening on Kiwi’s platform on a monthly basis, highlighted, a recent report titled ‘Credit Card on UPI’.
Furthermore, 75 per cent of all these transactions occur at small merchants, showcasing widespread acceptance and utilisation of credit card payments.
The adoption of 'Credit Cards on UPI' was highest among young adults below 40 (78 per cent of the users). CC on UPI has become the primary mode of payment, with users spending more than Rs 22,000 every month.
The average number of transactions using a CC on UPI is 21 per month, which is four times that of a traditional physical credit card.
The report notes that the average transaction size for 'Credit Cards on UPI' users is Rs. 1,125, significantly lower than traditional credit card transactions, which average around Rs. 4,000.
Additionally, the data showed that grocery and Kirana stores were frontrunners in embracing 'Credit Cards on UPI' (constituting 33 per cent of total usage), followed by apparel and electronics (15 per cent) and food and dining (7 per cent). The remaining 45 per cent of expenses are spread across e-commerce, travel, government services, fuel, pharmacies, etc.
Kiwi offers customers the opportunity to experience "Credit on UPI" through its partnership with banks to issue RuPay Credit Cards.
According to RBI data (as of April 2024), there are about 320 million merchant acceptance touchpoints for UPI payments, far surpassing the 9 million PoS terminals available for credit card payments. This broad network, coupled with convenience, has driven the rapid growth of 'credit cards on UPI' over the past year.
Kiwi Co-founder Mohit Bedi said, "Rupay Credit Cards' market share has grown from 3 per cent in FY23 to 10 per cent in FY24. This success can be largely attributed to UPI's success. The concept of virtual credit cards has picked up exponentially. Nearly 20 out of every 100 credit cards being issued in the country are virtual credit cards.”
This signifies the growing reliance on digital payment solutions for not only discretionary expenses but also daily expenses.
"Our 'Credit Cards on UPI' report signifies that 'CC on UPI' is pushing merchants and card users towards mindful credit card use. This will empower creditworthy individuals across the country to establish and strengthen their credit profiles," Bedi added.
