Credit line on UPI could cross $1 trillion in transaction value by 2030: Zeta
Credit line on UPI could surpass the $1 trillion in transaction value by 2030, Zeta a banking tech unicorn has forecasted. The credit line provides 80% of pre-approved, inactive credit customers on the UPI network with instant access to credit lines.
After it was first launched in August 2016, UPI took a little over 3 years to reach 1 billion transactions in a month. Less than 5 years later, UPI clocked 13 billion transactions in April 2024 alone.
Zeta has forecasted that UPI could also hit the $1 trillion mark by 2030.
“Riding on UPI rails, credit line on UPI adoption will be exponentially higher than other on-demand credit products like overdrafts and even credit cards,” the report stated.
Zeta sees three tailwinds helping this growth which includes growth in demand for credit, shift towards digital payments and improvements in discovery, activation and
utilization of credit.
India’s credit-to-GDP ratio of 40% is still one of the lowest among emerging markets. 60% of new credit originations are from Tier 2 and rural areas. Despite this demand, banks have been unable to service them effectively due to a lack of visibility and reach.
According to recent estimates, approximately 45% of household spend in India is digital using a combination of credit cards, debit cards, person-to-merchant (P2M) UPI transfers, net banking, and financing.
“We estimate that 40% of the P2M transaction base will move from direct bank debits to credit, assuming a 40% credit-to-digital spend ratio,” Zeta said. “This is a significant
