Fintech founders may be rueing the lack of ‘standing instructions’ on the updated version of Unified Payments Interface, but the application in its present form is emerging as the preferred gateway for consumers to repay loans.
Multiple fintech entrepreneurs ET spoke with said they are either in the process of bringing in UPI as a repayment mode or have already done so, hoping that the popular application will improve the repayment trend.
“On LazyPay, we have almost 30% of the repayments now happening on UPI,” said Jitendra Gupta, managing director of PayU India. “Around six months back it was zero, which shows the kind of growth in adoption that we have seen on UPI.”
LazyPay works with payment gateway service provider PayU to offer UPI as a payment solution.
Lizzie Chapman, cofounder of digital lending startup ZestMoney, said more than 40% of the repayments are now happening on UPI. “I think the major reason that could be driving this behaviour is that the payment experience is very smooth and consumers love the way transaction happens on UPI,” said Chapman.
Pune-based Loantap uses UPI or IMPS for payment of instalments in case the auto debit facility does not work for a specific bank account. Satyam Kumar, chief executive of Loantap, told ET that a very small share of repayments happen on UPI.
“Even within that, repayments on UPI is growing at 10% per month, while IMPS is stagnant, showing the increasing popularity of the payment mode,” said Kumar. Loantap runs the UPI handle with Yes Bank named Loantap@yesbank.
Industry executives also pointed out that the gamification angle exploited by players like Google Pay and PhonePe for UPI transactions has also helped in its wider adoption. Google Pay popularised scratch cards in India where ‘cashbacks’ won by consumers are shown, which has made payments an exciting experience as well, they said.
Simpl, a micro-credit startup in the ‘buy now and pay later’ space, is also using UPI extensively for repayment of credit availed by its consumers.
“We plan to launch UPI as a payment mode on our platform within the next quarter,” said Bala Parthasarathy, chief executive officer, Moneytap, a Bengaluru-based startup that offers consumers a credit line in partnership with banks and NBFCs.
While pureplay fintech lenders are using UPI to encourage customers to repay their loans, Aspire Home Finance, a housing finance subsidiary of Motilal Oswal group, is also seeing increased repayments through UPI, inspite of loans being of much larger ticket size.
“In August of last year, when we started different digital payment modes, UPI was only 1.2% of our total repayment transactions. As of February this year, the share has gone up to 4% and adoption is still showing signs of going up,” said Sanjay Athalye, managing director, Aspire Home Finance Corporation.
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