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The Hindu
a day ago
- Business
- The Hindu
PayPal to launch cross-border platform with link to India's UPI payments system
Payments firm PayPal has partnered with the operator of India's popular unified payments interface and others to launch a global platform through which consumers can make cross-border payments to businesses. The platform, PayPal World, will enable interoperability between local payment platforms and PayPal, the firm said in a statement on Wednesday. Its partners for the platform include National Payments Corporation of India - India's payments authority that operates UPI, Brazil's Mercado Pago, Tencent Holdings' Tenpay Global and Venmo. UPI dominates digital payments in India, accounting for about 85% of the total volume of retail digital payments, per regulatory data. "The integration of UPI on PayPal World's platform will mark a significant step in expanding UPI's global footprint," said Ritesh Shukla, managing director and CEO of NPCI International Payments Limited. India has been in talks with countries in Africa and South America to help them build a digital payments system using UPI as a blueprint. PayPal's platform is expected to go live later this year. The firm intends to add more partners going forward.
Mint
2 days ago
- Business
- Mint
What is credit on UPI and why it matters to your finances
Unified Payments Interface (UPI) has been the backbone of India's digital payment revolution for the past several years. What started as a convenient payment method within India has now transcended borders, with UPI adoption spreading to neighbouring countries as well. As of the first quarter of FY 2025–26, nearly 675 banks are live on UPI, processing over 18 billion transactions per month, with a total transaction value exceeding ₹ 24 lakh crore. In essence, UPI has transformed the way we make payments, turning digital transactions into an everyday habit for millions of Indians. From buying a packet of milk to purchasing daily vegetables or even more significant discretionary items like clothing, electronics and even digital gold - UPI has become a seamless and trusted way to pay. What's even more remarkable is that UPI isn't just a favourite among the younger, tech-savvy generation, it has also found acceptance among older users, including baby boomers, who have adapted to this digital mode with ease. But UPI is no longer just about payments. In recent years, UPI has evolved into a broader financial ecosystem. One of the most notable developments came in 2023, when the National Payments Corporation of India (NPCI) introduced 'Credit on UPI.' This move enabled users not only to make payments digitally from their bank accounts but also to borrow money digitally and use it for payments, all within the UPI framework. Credit on UPI can be broadly categorized into two types: UPI-Linked Short-Term Loans: This facility allows individuals to access small-ticket loans, ranging from a few thousands to up to a lakh rupees, which are credited directly to their bank accounts. These accounts are already linked to their UPI IDs, enabling users to make purchases or transfers using UPI, just like they would with their own funds. RuPay Credit Cards Linked to UPI: Another channel is the ability to link RuPay credit cards to a UPI ID. This allows users to tap into their credit card limits and make UPI payments using credit. While this is currently limited to RuPay credit cards (Visa and Mastercard are not yet supported), it adds another dimension to how users can access and utilize credit digitally. However, not all merchants currently support payments through UPI-linked credit cards. The number is growing steadily as more businesses upgrade their infrastructure to accept this form of payment, but coverage is still expanding. While UPI-based credit offerings make borrowing and payments more accessible, they still operate under the traditional principles of lending. Just like a personal loan or a credit card, any form of UPI credit requires the lender to assess the borrower's creditworthiness. This is typically done using credit bureau reports and credit scores. Moreover, these credit lines, whether through a RuPay credit card or a UPI-linked short-term loan, are reported to credit bureaus. That means your usage, repayment behaviour, and delinquencies (if any) directly impact your credit report and your credit score. For many users, the experience of using credit via UPI may feel no different from using their regular bank balance. But it's crucial to remember: you are borrowing money, not spending your own funds. This convenience should not come at the cost of financial responsibility. Users must maintain the same discipline with UPI credit as they would with any traditional credit facility. This includes: Borrowing only when necessary Making repayments on time, whether in EMIs or lump sums Understanding the repayment terms clearly Avoiding defaults, which will be reported to credit bureaus Any delay or missed payment will be flagged as delinquency, negatively impacting your credit score and future borrowing potential. A poor credit score can limit your access to financial products or result in higher interest rates when you apply for loans later. Credit on UPI brings a new level of convenience and flexibility to India's digital payment ecosystem. It simplifies access to short-term credit and integrates it seamlessly into the UPI platform we already use daily. However, with this ease comes the responsibility to manage credit wisely. As digital credit becomes more integrated into everyday transactions, it's essential to stay mindful of its implications. UPI may feel like you're simply transferring money from your bank, but when credit is involved, it's a loan, complete with reporting, repayment obligations, and long-term financial consequences. So, while credit on UPI makes life easier, use it consciously and repay it diligently. It's not just a payment- it's a financial commitment. Disclaimer: The information provided in this article is for informational purposes only and does not constitute financial, legal, or professional advice. While every effort has been made to ensure accuracy, readers should verify details independently and consult relevant professionals before making financial decisions. The views expressed are based on current industry trends and regulatory frameworks, which may change over time. Neither the author nor the publisher is responsible for any decisions based on this content. Ramkumar Gunasekaran, Director Sales, CRIF High Mark
Time of India
3 days ago
- Business
- Time of India
No wider adoption: Why Fastag's growth beyond toll payments is limited
The Fastag system faces challenges with inadequate bank-based customer support. Fastag may be used for toll payments pan India but its adoption for wider use cases still remains severely limited. The electronic toll collection system has shown negligible growth in the last fiscal year. The system's growth, including transaction volumes and participating banks, has remained largely static. According to National Payments Corporation of India statistics, Fastag processes between 350-380 million monthly transactions, maintaining consistent levels since January 2024. The monetary settlements have remained within Rs 6,000 to Rs 6,500 crore during this period. The number of banks offering Fastag services has stayed at 38, unchanged since May 2023. UPI , the leading digital payment platform, has expanded its network to include 675 participating banks, showing significant growth from 445 banks in May 2023. Industry experts point to the limited application of Fastag beyond toll collection as a primary reason for its stalled progress. Also Read | FASTag annual pass: How to purchase, validity, cost, trip limit & more - Top 15 FAQs answered "Toll payments are undertaken by consumers only that many times in a month or a year, and even for commercial vehicles, almost the entire base has been already covered, and the sector is also not growing exponentially," said a top executive at a digital payments firm which processes Fastag payments. "Overall, the payment method has stagnated at a certain level, the executive said according to an ET report. Why is Fastag growth stalled? Initially designed for digital toll collection on highways, Fastag's intended scope included various vehicle-related payments, including fuel purchases and parking fees. Fastag growth stalled "While a limited number of large commercial properties like shopping malls have started using Fastag as a payment method for their parking fees, fuel has shown almost no adoption," said the founder of a fintech startup offering this service. Smaller commercial properties have been reluctant to implement Fastag systems due to substantial costs associated with installing compatible gates and tag readers. "A large mall might be processing around Rs 30 to 40 lakh in parking payments per month, for that, the installation and maintenance might be a bit cumbersome," the founder added. The installation expense for each gate is estimated to be between Rs 1.5 to 2 lakh, with additional upkeep costs to be considered. "There is no margin to be made on fuel payments, hence that use case is also not picking up," said the executive of a digital payments firm cited above. Also Read | FASTag-based Annual Pass announced! Nitin Gadkari says new pass to have fee of Rs 3,000 - details here In India, kerbside parking remains predominantly cash-based or QR code-dependent, with no significant movement towards Fastag adoption, despite being the country's most common parking method. Financial industry experts indicate that fintech companies' disappointment with digital payment revenue generation has deterred private enterprises from new payment ventures. The growth in UPI adoption was primarily driven by substantial marketing investments that provided customer incentives. "No new-age fintech is pumping funds into digital payments right now. Fastag and such payment methods needed incentives to get more customers to use them readily, in the absence of incentives new use-cases are not building up," said the founder of a digital payments startup. The Fastag system faces challenges with inadequate bank-based customer support, particularly regarding blocked tags and top-up difficulties. Despite distributors like PhonePe and Amazon Pay being involved, they depend on banks for customer service, which often fails to meet user expectations. "Banks make money on the float they get through these payments, otherwise there is hardly any incentive for others to offer superior customer experience," said the founder cited above. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Time of India
4 days ago
- Automotive
- Time of India
Fewer use cases take toll on Fastag growth
Fastag, the modern electronic payment system for vehicle owners and the entire travel ecosystem, is stagnating, with almost negligible growth in the last financial year. Even the number of transactions and banks going live on the payment method remained sluggish during the year. Lack of evolution of new use cases for Fastag, beyond toll payments, is one of the key factors hindering its growth, said people in the know. 'Toll payments are undertaken by consumers only that many times in a month or a year, and even for commercial vehicles, almost the entire base has been already covered, and the sector is also not growing exponentially,' said a top executive at a digital payments firm which processes Fastag payments. 'Overall, the payment method has stagnated at a certain level.' Data shared by the National Payments Corporation of India , which powers settlements on Fastag, showed 350-380 million transactions are processed on Fastag every month, which has stayed constant since January 2024. In terms of fund settlement, it has hovered between Rs 6,000 and Rs 6,500 crore in the same period. Around 38 banks are currently active on Fastag, unchanged since May 2023. While payment methods are not directly comparable, for context, Unified Payments Interface (UPI), the most popular digital payment method, currently has 675 banks live on the platform. In May 2023, there were 445 banks. While Fastag was initiated with the aim of digitising highway tolls, its use cases were conceived to be eventually expanded to everything concerning a vehicle such as fuel purchases, and parking payments, among others. 'While a limited number of large commercial properties like shopping malls have started using Fastag as a payment method for their parking fees, fuel has shown almost no adoption,' said the founder of a fintech startup offering this service. The high cost of installing Fastag-capable gates and tag readers has discouraged smaller commercial estates from adopting them. 'A large mall might be processing around Rs 30 to 40 lakh in parking payments per month, for that, the installation and maintenance might be a bit cumbersome,' the founder added. He said the average cost of installing a single gate could be around Rs 1.5 to 2 lakh, in addition to maintenance cost. 'There is no margin to be made on fuel payments, hence that use case is also not picking up,' said the executive of a digital payments firm cited above. Kerbside parking, one of India's most popular ways of parking vehicles, has also shown no signs of adopting Fastag as a payment method, with transactions mostly through QR codes or cash. Industry insiders also pointed out that the overall disillusionment among fintech startups on generating revenue from digital payments is one of the major reasons behind private firms not taking any fresh initiative on payments. They added that UPI grew in popularity due to large marketing spends into the ecosystem which incentivised customers towards adoption. 'No new-age fintech is pumping funds into digital payments right now. Fastag and such payment methods needed incentives to get more customers to use them readily, in the absence of incentives new use-cases are not building up,' said the founder of a digital payments startup. Fastag is also plagued by inefficient bank-led customer service, especially during instances of blacklisted tags or recharge issues. While PhonePe, and Amazon Pay are among Fastag distributors, they rely on banks for customer service, where the experience is often subpar. 'Banks make money on the float they get through these payments, otherwise there is hardly any incentive for others to offer superior customer experience,' said the founder cited above.
Time of India
4 days ago
- Automotive
- Time of India
Fewer use cases take toll on Fastag growth
ETtech Fastag, the modern electronic payment system for vehicle owners and the entire travel ecosystem, is stagnating, with almost negligible growth in the last financial year. Even the number of transactions and banks going live on the payment method remained sluggish during the of evolution of new use cases for Fastag, beyond toll payments, is one of the key factors hindering its growth, said people in the know.'Toll payments are undertaken by consumers only that many times in a month or a year, and even for commercial vehicles, almost the entire base has been already covered, and the sector is also not growing exponentially,' said a top executive at a digital payments firm which processes Fastag payments. 'Overall, the payment method has stagnated at a certain level.'Data shared by the National Payments Corporation of India , which powers settlements on Fastag, showed 350-380 million transactions are processed on Fastag every month, which has stayed constant since January 2024. In terms of fund settlement, it has hovered between Rs 6,000 and Rs 6,500 crore in the same period. Around 38 banks are currently active on Fastag, unchanged since May payment methods are not directly comparable, for context, Unified Payments Interface (UPI), the most popular digital payment method, currently has 675 banks live on the platform. In May 2023, there were 445 Fastag was initiated with the aim of digitising highway tolls, its use cases were conceived to be eventually expanded to everything concerning a vehicle such as fuel purchases, and parking payments, among others.'While a limited number of large commercial properties like shopping malls have started using Fastag as a payment method for their parking fees, fuel has shown almost no adoption,' said the founder of a fintech startup offering this high cost of installing Fastag-capable gates and tag readers has discouraged smaller commercial estates from adopting them.'A large mall might be processing around Rs 30 to 40 lakh in parking payments per month, for that, the installation and maintenance might be a bit cumbersome,' the founder said the average cost of installing a single gate could be around Rs 1.5 to 2 lakh, in addition to maintenance cost.'There is no margin to be made on fuel payments, hence that use case is also not picking up,' said the executive of a digital payments firm cited parking, one of India's most popular ways of parking vehicles, has also shown no signs of adopting Fastag as a payment method, with transactions mostly through QR codes or insiders also pointed out that the overall disillusionment among fintech startups on generating revenue from digital payments is one of the major reasons behind private firms not taking any fresh initiative on payments. They added that UPI grew in popularity due to large marketing spends into the ecosystem which incentivised customers towards adoption.'No new-age fintech is pumping funds into digital payments right now. Fastag and such payment methods needed incentives to get more customers to use them readily, in the absence of incentives new use-cases are not building up,' said the founder of a digital payments is also plagued by inefficient bank-led customer service, especially during instances of blacklisted tags or recharge issues. While PhonePe, and Amazon Pay are among Fastag distributors, they rely on banks for customer service, where the experience is often subpar.'Banks make money on the float they get through these payments, otherwise there is hardly any incentive for others to offer superior customer experience,' said the founder cited above.
