Freo's UPI Credit: The New Age Fintech Redefining Financial Access

In the last few years, the world has witnessed a massive transformation in the way transactions are done. Small-ticket day to day loans, once too insignificant for traditional banks, have now been overtaken by new-age startups. The past decade has witnessed the evolution and adaptability of digital lending platforms, payment gateways, and fintech companies in India. 

Credit on UPI

Today, UPI (Unified Payments Interface) stands as the undisputed hero of digital payments, captivating audiences with its free, safe, swift, seamless, flexible, and convenient features. Taking this to the next level, one startup has introduced and mastered the process of extending credit via UPI.

India's Digital Public Infrastructure (DPI) has played a transformative role in revolutionizing customer onboarding processes, particularly in enabling innovations like credit on UPI. With a focus on customer-centricity, a Bengaluru based fintech Freo seamlessly integrates credit facilities into UPI transactions, foreseeing a paradigm shift in transactional dynamics.

Meet Mr Anuj Kacker, a key figure in India's Fintech Startup Landscape. He is an executive committee member of Digital Lenders Association of India (DLAI) and co-founder of Freo.

In a conversation with TICE, Anuj shared insights on the growing significance of digital lending platforms and how new age startups like Freo are democratizing access of credit.

Industry Conclaves: Fostering Collaboration and Innovation

On the sidelines of the DLAI Conclave, Anuj spoke on the essence of DLAI emphasizing its role as a pivotal industry body, convening stakeholders across the digital lending spectrum. From fledgling startups to established giants, the conclave serves as a nexus for ideation, collaboration, and networking.

He underscored the diverse participation, including representatives from regulatory bodies like SIDBI, RBI, and NPCI, alongside banking partners and fintech innovators. Anuj highlighted how these interactions fuel discussions on industry trends, policy shaping, and emerging opportunities.

".. it serves as a nexus for startups, financial institutions, regulatory bodies, and ecosystem partners to collaborate, innovate, and shape the future of the industry," he highlighted.

Impact of Digital Public Infrastructure (DPI) on Fintech

Delving into the evolution of India's DPI, Anuj elucidated its transformative role in streamlining customer onboarding processes. He credited initiatives like Aadhaar and the India Stack for standardizing authentication procedures, reducing onboarding costs, and fostering innovation.

By leveraging DPIs, Anuj explained, fintech firms have shifted focus from process innovation to enhancing value propositions for customers. Standardized procedures have levelled the playing field, necessitating differentiation through product offerings. Reflecting on the pivotal role of the Indian Digital Public Infrastructure (DPIs), Kakkar underscored the transformative impact of Aadhaar.

"India's Digital Public Infrastructure, anchored by Aadhaar and the India Stack, fundamentally revolutionizes customer identification and authentication. It ensures seamless access with customer consent, safeguarding against data misuse. DPIs play a pivotal role in streamlining processes and upholding data integrity," he said.

Understanding UPI on Credit: Transforming Transactional Dynamics

Anuj elucidated the concept of UPI on credit, elucidating how it diverges from traditional debit transactions. Through Freo's innovative approach, customers can leverage credit facilities seamlessly during UPI transactions, offering flexibility and convenience.

He outlined two modalities: rupee credit cards and credit lines, both aimed at democratizing access to credit. Anuj emphasized the vast market potential, fuelled by the burgeoning adoption of UPI, envisioning a paradigm shift in transactional dynamics.

"...Rs 50 rupees is coming from your bank account that is linked to the UPI and could be any, your personal savings....and if you are using the Freo app and you want to use the credit on UPI option, when you scan the QR code using the Freo app, that 50 rupees will come not from your bank account, but from a credit account.  Which means that you may not necessarily have that 50 rupees in your bank account, but I'm ready to give you an option to pay me back at the end of the month. Right. That's called credit on UPI. The earlier one was a debit on UPI, now it's a credit on UPI," Anuj explains. 

Mitigating Risks and Ensuring Financial Literacy

Responding to concerns about potential debt traps, Anuj emphasized the adherence to stringent underwriting standards. He emphasized the pivotal role of customer education, leveraging app-based tutorials, and proactive communication to ensure clarity and transparency.

Reflecting on Freo's product roadmap, Anuj highlighted the diversification beyond credit offerings. From digital banking solutions to investment avenues, Freo aims to empower customers holistically, catering to diverse financial needs.

Anuj underscored the importance of safeguarding sensitive information like OTPs and PINs. He cautioned against sharing such data, highlighting their critical role in thwarting fraudulent activities.

Pioneering the Future of Fintech

As the curtains drew on the DLAI Conclave, Anuj Kacker's insights shed light on the symbiotic relationship between industry gatherings and fintech evolution. Through collaboration, innovation, and a commitment to customer-centricity, stakeholders can  navigate the dynamic landscape of digital lending in India.

Join Our Thriving Entrepreneurial Community

Follow TICE News on Social Media and create a strong community of Talent, Ideas, Capital, and Entrepreneurship. YouTube  | Linkedin | X (Twittrer) | Facebook | News Letters