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YES BANK and Vegapay Transform Credit Access with Innovative UPI Platform

November 22, 2024: Vegapay, a next-generation technology innovator in the banking software industry has announced a strategic partnership with YES BANK, the sixth largest private sector bank in India, to launch its hyper-configurable ‘Credit Line on UPI’ platform. Through this platform, YES BANK can create customised credit programmes that suit customers’ needs. They can decide whether to offer interest-free or interest-bearing credit, whether or not allow customers to pay in instalments (EMIs), and set up rules for different situations—all through an easy-to-use interface. This collaboration aims to redefine credit access across India, empowering banking institutions to deliver a modern credit experience to millions of Indians through the widely popular Unified Payments Interface (UPI).

With over 350 million active users and processing more than 14 billion transactions monthly, UPI forms the backbone of digital payments in India. Despite this phenomenal growth, formal credit remains elusive for a significant portion of users, with only 15-20% holding credit cards. Vegapay’s partnership with YES BANK addresses this gap by leveraging UPI’s extensive reach to provide seamless credit solutions to a broader audience.

Mr. Rajan Pental, Executive Director, YES BANK said, “UPI has reshaped the digital payments space in India, but the challenge of extending formal credit to a wider audience remains. YES BANK occupies a significant share in the payments and digital businesses, and is always at the forefront to implement initiatives to maintain its leadership position through engagements like API banking, customised digital solutions, and advisory services. One in every three digital payment transactions in the country is processed by YES BANK, exerting leadership in the UPI space. With ‘Credit Line on UPI’, we will be able to bridge this gap further, supporting a credit-driven future for millions of Indians. Our partnership with Vegapay equips us with a robust, adaptable platform that aligns with the security and compliance needs of banking institutions while addressing the growing demand for seamless credit solutions.”

Mr. Nalin Bansal, Chief of Fintechs, Corporates and Key Initiatives, NPCI said, “We at NPCI are thrilled to see the collaboration between Vegapay and Yes Bank. Vegapay’s Credit Line on UPI platform capabilities and speed of execution have set a new standard in the industry. They were the one of the first to launch their Credit Line on UPI service through NPCI Partner Program (NPP) which has helped them to build and deliver a strong technology solution. We wish that the seamless partnership between Yes Bank and Vegapay will help in driving financial inclusion and enhance experience for both Existing to Bank (ETB) and New to Bank (NTB) credit seeking customers.”

The platform includes a user-friendly dashboard and a customisable app, making it simple for banks to integrate with their existing systems. This setup reduces unnecessary steps and focuses on collecting only essential information, making the process more efficient. As UPI transactions are projected to grow at an annual rate of 57% through FY 2024, the market for UPI-linked credit products is expected to exceed $50 billion by 2025. Leading banks like YES BANK are exploring UPI-linked credit offerings, signalling a growing demand for modern, flexible credit line on UPI platforms like Vegapay.

Gaurav Mittal, Co-founder and CEO of Vegapay said, “Our mission at Vegapay is to bridge the credit divide in India by empowering financial institutions with the technology to launch a Credit Line on UPI in weeks, not years. This enables financial institutions to extend credit access to a broader audience, including the traditionally underserved. The platform’s scalability ensures it can grow its processing capacity as the customer base increases, capable of handling thousands of transactions per second while meeting the stringent availability and latency SLAs required by payment systems standards. This enables financial institutions to swiftly adapt to market demands and handle UPI’s massive transaction volumes.”

Backed by a recent $5.5 million seed funding round led by Elevation Capital, Vegapay is well-positioned to drive the next wave of innovation in digital credit solutions. The partnership with YES BANK marks a significant step toward creating a more credit-inclusive economy in India.

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