The *next* UPI moment for India's Retail Digital Payments has been announced- Credit cards can now be linked to your UPI, starting with RuPay
A Thread π§΅
A Thread π§΅
UPI is India's leader in digital payments with 60% market share in only 5 years of launch breaching the $1 trillion mark in payment volume only recently.
First, the upsides
First, the upsides
π β The ability for credit cards to 'ride on UPI' rails provides credit payment instruments the same ubiquity afforded to debit cards (via UPI) namely accessing a credit line at a POS by simply scanning a QR (cont)
(Cont) QR code acceptance reduces the cost of merchant terminalization which so far has been the main friction limiting POS infrastructure penetration beyond Tier 1 cities in India
π β A very Serious threat to credit-at-the-point-of-purchase or BNPL for the non-credit card populace. How can any serious BNPL provider compete with UPI at this scale? This actually gives credit card issuers a major boost
πβ Competitive Advantage for Team National Payments Corporation Of India (NPCI) and RuPay over any other network in the market being the first-to-market and becoming top-of-wallet for users
βAre there any downsides?
π β Credit Card Issuers rely on Interchange to provide differentiated rewards to users. YES- fees is a major income source of the P&L however, with the #ZeroMDR regime how are they to going to sustain this business with zero margins and huge expenses
π β Credit Card Issuers rely on Interchange to provide differentiated rewards to users. YES- fees is a major income source of the P&L however, with the #ZeroMDR regime how are they to going to sustain this business with zero margins and huge expenses
πβ Will merchants now have to pay for credit card funded transactions and if they do,will there be a repeat of what happened with POS terminals where merchants charged users for paying with credit or a certain type of card or withdraw from offering digital payments?
Are you excited about the launch of Credit Cards on UPI?
π£ If yes, why- > what do you think will be the impact short term , medium term and long term?
π£ If no, why -> what do you think will not work for credit cards on UPI? will the historical performance of UPI be repeated
π£ If yes, why- > what do you think will be the impact short term , medium term and long term?
π£ If no, why -> what do you think will not work for credit cards on UPI? will the historical performance of UPI be repeated
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