Fintech Company PhonePe Launches New Credit Line On UPI; Check Steps To Link It For Digital Payments

PhonePe, one of India's digital payment platforms, announced the launch of its new feature, Credit Line on UPI, on August 22. This development allows consumers to link pre-approved credit lines from their banks to UPI, facilitating seamless payments across millions of merchants. This feature not only broadens the scope of UPI but also aligns with the Reserve Bank of India's (RBI) recent decision to extend UPI services to include pre-approved credit lines.

The introduction of Credit Line on UPI by PhonePe reflects the growing demand for flexible payment options in India. This move is set to transform how consumers access and utilize credit, making the process more straightforward and integrated into their daily digital payment habits. With this feature, users can now access credit through their respective banks and use it via UPI apps like PhonePe.

PhonePe's initiative comes on the back of the RBI's decision to widen the UPI framework. By allowing pre-approved credit lines to be linked to UPI, the RBI aims to make credit more accessible and to promote digital payments as the preferred mode of transaction across the country. This development is expected to drive financial inclusion and encourage responsible credit usage among consumers.

For merchants, the Credit Line on UPI offers advantages. PhonePe's Payment Gateway (PG) will now support this new payment method, providing customers and merchants with more flexibility at checkout. By integrating with PhonePe PG, merchants can enable the Credit Line on UPI as a payment option, which is anticipated to reduce cart abandonment-a common issue in e-commerce. The ability to offer a credit-based payment option at checkout is likely to boost sales, as it provides consumers with an additional and convenient way to complete their purchases.

Deep Agrawal, Head of Payments at PhonePe, expressed his enthusiasm about the launch, stating, "We are excited to launch Credit Line on UPI on our platform. This is the second offering that will unlock the potential of credit usage on UPI, following the tremendous success of RuPay Credit Cards on UPI. We believe digital payments in India are growing from strength to strength, and PhonePe is committed to providing the most innovative and best-in-class solutions to our customers. This offering will revolutionize the access and use of credit in the country, and we are focused on offering a varied set of new use cases in close partnership with ecosystem players."

PhonePe has made it easy for users to link their Credit Line on UPI. Here's a step-by-step guide:

Access Your Profile: Users can start by clicking on the profile section located at the top left corner of the PhonePe app home page.
Select Your Bank: In the profile section, users will find an option to select the bank from which they have availed of the Credit Line.
Link Your Credit Line: The Credit Line associated with the registered phone number will be linked to UPI upon selecting the bank.
Set UPI PIN: After linking, users will need to set a UPI PIN to secure their transactions.
Start Using the Credit Line: Once the setup is complete, the Credit Line option will appear as a payment instrument during the checkout process, allowing users to make payments directly from their linked credit line.