Indian fintech ZET has secured approval from the National Payments Corporation of India (NPCI) to operate as a Third-Party Application Provider (TPAP). This allows the company to launch ZET UPI, integrating its credit card services with the popular payments network. The feature lets customers link their RuPay credit cards for UPI transactions, earning rewards while expanding access to formal credit.
Expanding Credit Access Through UPI
ZET primarily serves India's "credit-invisible" population, a segment with limited credit history. Its core offering is a fixed-deposit-backed RuPay credit card, designed as an entry point into the formal credit system. The company reports that approximately 75% of its one million users are first-time credit card holders, highlighting its focus on financial inclusion.
The new ZET UPI feature allows these customers to link their RuPay credit cards for seamless payments across the UPI merchant network. To incentivize adoption, the company offers a flat 2% cashback on all transactions made through this facility. This move is designed to fit naturally into users' daily lives while promoting disciplined and transparent credit habits.
A Strategic Play for Underwriting Data
Unlike competitors using UPI for customer acquisition, ZET is taking a different strategic approach. The company is initially offering ZET UPI exclusively to its existing credit card customers, thereby focusing on engagement rather than growth. This strategy leverages its established credit product as the primary gateway into its ecosystem for new users.
This integration is critical for gathering rich behavioral intelligence, a cornerstone of ZET's business model. By observing daily UPI spending across various categories, the company gains deep insights into customer financial habits. This data is then fed into its proprietary underwriting models to build more accurate and dynamic risk profiles.
According to co-founder Manish Shara, this continuous flow of transaction data allows ZET to build confidence in customer profiles before extending further credit. The ultimate goal is to leverage this enhanced understanding to offer seamless, one-click credit experiences. This data-centric approach is fundamental to solving the credit gap for its target demographic.
Early Traction and Future Ambitions
Since receiving its TPAP license in December, ZET has witnessed rapid adoption of its new UPI feature. The company reported that a significant majority of its eligible cardholders linked their cards to ZET UPI within weeks of launch. With a base of one million eligible users, ZET projects monthly UPI transaction volumes will reach approximately Rs 100 crore.
ZET's ambitions are firmly rooted in lending, supported by partners like Juspay and RBL Bank. The company recently acquired a Non-Banking Financial Company (NBFC) license, which it plans to operationalize for direct lending. This move complements its existing co-branding partnerships with three banks, including the public sector Indian Overseas Bank.
The company's strategy has attracted top-tier investors, including Peak XV Partners, General Catalyst, and Nexus Venture Partners. ZET is currently in discussions with new investors, citing strong interest due to its diversified infrastructure and focused market approach. This backing provides a solid foundation for its next phase of growth and product expansion.
By embedding its credit offerings within the UPI framework, ZET is creating a powerful ecosystem for financial inclusion. This integration is more than a payment feature; it is a mechanism for understanding and serving a vast, credit-underserved population. The move positions ZET to build a sustainable, data-driven lending business while empowering millions on their financial journey.
Source: YourStory