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HomeStart UpFintech unicorn Zeta launches UPI-linked credit-as-a-service for banks 

Fintech unicorn Zeta launches UPI-linked credit-as-a-service for banks 

Zeta, a Mumbai-based fintech unicorn, has introduced a credit-as-a-service platform. This platform aids banks in developing, launching, and managing credit products using the National Payment Corporation of India’s (NPCI) credit line on UPI.

The credit-as-a-service platform streamlines the process for banks. They no longer need to integrate multiple software and services to manage a credit product, from origination to processing, as well as digital services like rewards and customer service. Zeta’s service combines functionalities from different software into one package.

Zeta, founded by serial entrepreneurs Bhavin Turakhia and Ramki Gaddipati, projects that the transaction volume on this platform will surpass $1 trillion by 2030. They aim to capture approximately half of this market.

“Banks have pre-approved credit for millions of customers but are unable to distribute loans to them efficiently,” Zeta said in a statement on Friday, adding that credit products that leverage the credit line on the UPI scheme would allow “consumers to borrow precisely how much they need when they need it”.

Moreover, it provides product blueprints to simplify the creation of credit lines on UPI products. Different types of credit offerings have different requirements. For example, a personal loan may have different repayment times and compliance or KYC requirements compared to an agricultural loan. Zeta has created blueprints for various types of loans to speed up the go-to-market process.

In addition, Zeta offers bundled services like customer support and operations, which it handles on behalf of the bank to decrease operational overhead.

Ramki Gaddipati, Zeta’s CEO APAC and Global CTO, describes it as a “credit distribution superhighway.”

“We saw UPI volumes put a strain on core banking systems. We anticipate similar volumes on credit line on UPI before long, and this calls for population-scale banking infrastructure capable of processing 100s of millions of credit accounts. We have pre-architected our solution for this from Day 1,” Gaddipati said.

The pricing for Zeta’s new product would depend on the subset of services a bank requires, said Gaddipati. 

“Each contract will take upwards of three years to deliver meaningful revenue to us. So, for the next three years, we do not expect credit-as-a-service to generate meaningful revenue for us. However, it would accumulate contracts that represent substantial revenue to be coming in the subsequent years,” Gaddipati added.

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