Navi aims to become a major UPI player as it scales credit line offerings

Rajiv Naresh, MD and CEO, Navi, says the fintech aims to capture a significant share of the UPI ecosystem by investing in credit line products, strengthening tech infra, and customer awareness

Fintech firm Navi is aiming at processing a significant chunk of the ecosystem’s Unified Payments Interface (UPI) transactions, with plans to leverage its base on the real-time payments system to scale products like credit line on UPI, said Rajiv Naresh, MD and CEO, Navi Limited.

 

Naresh, who was appointed lead for Navi group's non-lending businesses in February, said the company would continue further investment towards scaling products on the credit rails paired with UPI.

 

One of the company’s biggest anchors for scaling credit line on UPI is merchant-wide acceptance, dependable tech infrastructure, and stronger customer awareness.

 

“We're not intending to be a small player in UPI. Our ambition is to be a significant player… Growth (for credit on UPI), is going to take a little bit more investment on our side. That’s a key priority for us,” Naresh said.

 

Nationwide, the UPI network has over 450 million users. Navi launched UPI for its users in August 2023.

 

Since then, the company has climbed to be the fourth largest player in the ecosystem by the volume of transactions processed, one of the fastest to do so, cornering a share of 2.77 per cent.

 

In October, the Bengaluru-based company processed over 574 million UPI transactions with a total value of Rs 30,618 crore.

 

The largest firm on UPI, PhonePe, processed 9.41 billion transactions with a value of Rs 13.06 trillion in the same month.

 

“There are large incumbents and they do a good job. But, the one area that is a white space, of zero to one, for everybody is credit. It is a different product with multiple elements like bank partnerships, technology, underwriting and collections,” he explained.

 

In August 2024, Navi partnered with Karnataka Bank to roll out a credit line on UPI product for customers on the platform.

 

“The goal really is to keep driving up market share. I do think one lever that is interesting here that will have to emerge in is credit, though still early days. There's revenue to be made for TPAPs (third-party application providers) in its current form via credit, both RuPay and credit line,” he said.

 

He further explained that there is a high likelihood of migration of a large number of transactions to credit rails once they are made flexible and accessible to users.

 

Credit line on UPI facilitates the availability of low-ticket, high-volume retail loans through pre-sanctioned credit lines from banks, as per NPCI.

 

Naresh said that while cashbacks and rewards help drive early scale, customers ultimately stay with a payments app for its speed, reliability, and features.

 

“There are perhaps a few hundred million users emerging and also untapped, but the vast majority of users are tapped (on UPI). Cashbacks and reward systems, if executed well, drive the impulse of the customer, but after a point they stay only for the actual product,” he added.

 

Meanwhile, as companies scale up their volumes, the reward per transaction thins due to scale.

 

“I don't think people are switching allegiances or staying at least on account of a few rupees here and there,” he noted.