Fintech start-ups are unlocking another growth lever as Rupay credit cards which can be linked to the unified payments interface (UPI), are slowly catching up.
Fintechs like Rio, Kiwi, and Kredit.Pe and others are betting on RuPay credit cards linked to UPI, making credit transactions seamless across merchants.
While banks issue RuPay credit cards, these fintechs serve as facilitators, handling distribution, marketing, rewards, and loyalty programs. Additionally, they collaborate with major merchants to offer cashback incentives, driving consumer adoption and increasing transaction volumes.
“We had a strong hypothesis: once customers start using a credit card for UPI transactions, they naturally begin shifting their savings account UPI transactional. This transition is driven by convenience and an elevated experience. Over time, muscle memory shifts away from platforms like Google Pay and PhonePe as users get accustomed to the enhanced benefits of credit card payments on UPI,” said Mohit Bedi Co-Founder and CBO Kiwi.
Kiwi, which has raised close to $20 million in funding, has a virtual RuPay credit card platform, enabling users to make UPI-based merchant payments without the need for a physical card. The platform has facilitated transactions worth around Rs 300 crore monthly.
The product offers 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.
Expanding credit access
Fintechs have identified key user segments that benefit significantly from this shift. First, existing credit card holders now find themselves able to use their cards at small merchants, many of whom previously couldn’t accept credit payments due to the lack of POS machines.
“The RuPay credit card is the only card that will work on merchants who don’t have a POS machine,” said Prakash Sikaria, Founder and CEO of super.money. This opens the door for consumers to use credit at small businesses, a market traditionally underserved by credit card infrastructure.
Secondly, by creating access to credit for those who may not have qualified for traditional unsecured cards. Through secured RuPay cards, fintechs are giving many first-time credit users the chance to build their credit history.
A secured credit card is issued against a fixed deposit (FD), where the bank sets the card’s credit limit based on the FD amount. This ensures that even if a customer defaults, the bank can recover its funds without any risk to the principal.
To expand credit access while minimising risk, super.money has adopted the secured credit model. “There is a huge base of customers who are not being given an unsecured card. A secured card is a product catered to that demand, allowing more people to access credit,” added Sikaria.
Innovations for revenue
As fintechs continue to expand the reach of RuPay credit cards on UPI, they are also innovating new ways to generate revenue.
Most of these companies operate as credit enablers rather than direct issuers, partnering with banks to distribute and manage RuPay credit cards. This allows them to earn through card activation incentives and a share of user spending.
“Every time a bank issues a credit card through Kiwi, we earn a distribution payout, similar to any third-party agent,” said Bedi.
Additionally, fintechs are monetising user engagement and transaction volumes. Unlike traditional credit card holders, who typically make around 8–9 transactions per month, users of UPI-linked RuPay credit cards are spending much more frequently. “In a standard credit card setup, the average user makes fewer than 10 transactions a month. However, cash credit on UPI transactions, for cards that are managed by Kiwi, do about 22 to 24 transactions a month. Basically, customers pull out kiwi almost everyday,” he added. This higher transaction frequency enhances user retention and increases the potential for fintechs to earn commission-based revenues from banks.
Another key revenue driver is merchant partnerships, where fintechs collaborate with large retailers to offer exclusive rewards, discounts, and cashback incentives. These partnerships encourage users to transact via RuPay credit cards on UPI, increasing overall spending while driving value for both merchants and fintech platforms. “UPI is typically seen as a convenience-driven payment mode, whereas credit cards are about rewards and benefits,” said Sikaria. “By combining the two, we’re creating an ecosystem where UPI transactions become more rewarding, encouraging users to spend more.”
Beyond transactions, fintechs are also exploring value-added financial products, such as credit lines on UPI, secured credit cards, and digital wallets, to build a sustainable business model. Many are now looking at UPI Lounge Access, BNPL (Buy Now, Pay Later) solutions, and subscription-based financial tools to further monetize their platforms.
Kiwi has launched UPI-based lounge access at 22 airports, allowing users to enter lounges simply by scanning a QR code.
As UPI evolves beyond basic payments, fintechs are positioning themselves not just as payment facilitators but as comprehensive financial service providers.