Young adults below 40 years of age, constituting 78 per cent of the user base, are increasingly moving towards the adoption of 'Credit Cards on UPI', says a recent report by Kiwi, a credit-on-UPI platform. As per recent RBI data, till April India recorded around 320 million merchant acceptance touchpoints for UPI payments. These numbers surpass the 9 million point-of-sale (POS) terminals that are currently available for credit card payments, the report shows. The broad network of UPI transactions with the added benefit of accessibility and convenience has provided a significant push towards the rapid adoption of 'credit cards on UPI' over the past year.
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As per the report, over Rs 100 crore worth of ‘Credit Card on UPI’ transactions happen on Kiwi’s platform every month.
A look at the ‘Credit Card (CC) on UPI’ scenario:
- 75% of transactions occur at small merchants
- 78% of users are young adults (below 40)
- Over Rs 100 crore transactions taking place every month
- Users spend more than Rs. 22,000 every month using CC on UPI
- Average transaction size for users is Rs. 1,125
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Kirana Stores, small merchants get the biggest benefits!
The report shows that 75 per cent of all the transactions via CC on UPI were done at small merchants. This shows the expansive acceptance and utilisation of credit card payments by users for their daily needs.
Kirana or grocery stores were at the forefront of 'Credit Cards on UPI' adoption with around 33 per cent of total usage. This is followed by apparel and electronics at 15 per cent, and food and dining at 7 per cent.
45 per cent of expenses are visible across e-commerce, travel, government services, fuel, pharmacies, and other sectors. The massive adoption is symbolic of digital payments penetrating beyond simple discretionary expenses and into the day-to-day needs of the general public.
User preference for CC on UPI
Credit Card on UPI is fast becoming the primary mode of payment, the report claims based on data that users are spending over Rs. 22,000 every month. The average number of payments using a CC on UPI is 21 per month. This is almost four times that of a traditional physical credit card, the report says.
As per the data, the average transaction size for 'CC on UPI' users is Rs. 1,125. This is significantly less than traditional credit card payments (with an average of around Rs. 4,000).
“Rupay Credit Cards' market share has grown from 3 per cent in FY23 to 10 per cent in FY24,” Mohit Bedi, Co-founder of Kiwi said. He attributes this growth largely to the widescale adoption of UPI as a preferred mode of transactions.
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“Nearly 20 out of every 100 credit cards being issued in the country are virtual credit cards,” he states citing an exponential increase in the usage of virtual credit cards.
