New Delhi [India] November 19 : India's homegrown payments body, the National Payments Corporation of India (NPCI), is gearing up for a fresh wave of disruption in the country's credit landscape, after having transformed debit payments through Unified Payments Interface (UPI).
According to a research report by Bernstein, "NPCI has already disrupted debit cards through the explosive rise of UPI. Now, it's en route to shaking up credit cards too."
The report notes that India's payment ecosystem, powered by UPI, RuPay and a broad base of state-backed digital infrastructure, has created the conditions for an unprecedented shift away from traditional card networks.
UPI today accounts for over 90 per cent of retail digital payment transactions by volume, with QR-based acceptance eliminating the need for expensive point-of-sale terminals. The result has been a steady decline in debit card usage, replaced almost entirely by UPI's low-cost, instant-payment model.
The report highlights that the next phase of disruption comes from linking RuPay credit cards to UPI, allowing customers to use credit lines on the same QR-enabled merchant network that made UPI ubiquitous.
This move is expected to dramatically expand credit penetration, with RuPay already gaining traction in the credit card segment, jumping from 10 per cent to 38 per cent of UPI-linked credit card transactions in a short span.
The report explicitly names PhonePe, Paytm and Google Pay as the fintech players that have evangelised digital payments and are poised to benefit further from the credit-on-UPI wave. These platforms already dominate consumer UPI transactions, holding over 90 per cent combined market share.
The integration of credit lines directly into UPI will allow fintech apps to deepen engagement, unlock new lending-led monetisation opportunities, reduce dependency on legacy card-network economics and expand their overall financial-services footprint.
With credit on UPI continuing to gain ground, India's fintech ecosystem is expected to witness accelerated innovation and competitive gains, especially for large payment apps with massive distribution.
NPCI's model has shown that a domestic payment network, supported by regulators, government-led financial inclusion, and fintech innovation, can rival and potentially surpass global card networks while operating at a fraction of the cost.
As UPI-linked credit lines evolve, the report suggests that physical credit cards may eventually meet the same fate as debit cards, overshadowed by India's fast-paced digital ecosystem.
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