After a long wait, major banks like Axis Bank, HDFC Bank, and Kotak Mahindra Bank are preparing to offer credit payments through UPI.
While these banks already allow RuPay credit cards for UPI payments, the new feature called “Credit Line on UPI” will let users make payments even if they don’t have enough money in their bank accounts.
How the New Feature Works
The UPI Credit Line is essentially a small loan linked to your UPI account.
Users can pay for essentials immediately and repay later, with interest.
This product was first launched by NPCI in September 2023, and early providers included Karnataka Bank, Suryoday Small Finance Bank, Navi, and Paytm.
Collaboration with Fintech Startups
Axis Bank and HDFC Bank plan to partner with fintech startups like Navi, Super Money, and SalarySe to roll out this service.
The banks have been cautious until now because they needed clarity on interest rates, interest-free periods, and repayment terms.
Benefits for Banks and Customers
For banks, this initiative helps attract new customers and retain loyal ones who repay on time.
For users, it provides a flexible payment option in times of urgent financial need, making UPI more versatile than ever.
