A couple of years back, a new opportunity emerged for fintech startups: Rupay credit cards that can be linked to the unified payments interface (UPI), which has become a popular payment method.
Last year, multiple fintechs such as Rio, super.money, Kredit.Pe, and Jupiter launched apps that enable Rupay credit cards to be linked to UPI. Kiwi was the first fintech that focussed on building a platform where virtual Rupay credit cards can be linked to UPI for merchant payments.
Rupay credit cards are issued by banks and these fintechs act as their enablers as well as their marketing, rewards, and loyalty management platforms. The apps also partner with key large merchants to offer cashbacks to consumers.
“While the product is two years old, several fintechs have realised only now that this could be a profitable model to build a UPI payments business. Now companies are finding a good product-market fit with curated merchants and offers for customers,” said Mohit Bedi, Co-Founder, Kiwi, which has raised close to $20 million in funding. The platform facilitates transactions worth around Rs 300 crore monthly.
The product blends the best of credit cards and UPI, offering customers a credit-free period of 40-50 days and reward points, along with the ease of use of and acceptance of UPI among a large segment of merchants. While there are only 9o lakh businesses that accept cards, there are an estimated 32 crore UPI merchants.
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