Pine Labs, in collaboration with McKinsey, has identified “credit line on UPI” (CLOU) as the next major growth driver for credit-linked payments at checkout, amid rapid transformations in India’s lending landscape.
The report highlights that while India has around 330 million credit-ready consumers, 150–200 million remain underserved. Embedded credit solutions like CLOU aim to bridge this gap, offering seamless access to credit for small-ticket purchases. By 2030, credit-linked payment products could rival traditional home and auto loans in revenue generation, the report estimates.
The growth of CLOU is expected to be fueled by UPI’s ecosystem, which already includes 490 million consumers and 65 million QR-enabled merchants. However, while awareness of non-card credit options like BNPL or EMI on debit cards is high, actual adoption remains low due to challenges in discoverability, acceptance, and trust. Consumers prefer credit options that are simple, transparent, and available on familiar apps.
CLOU leverages existing QR infrastructure to enable small-ticket credit, making lending viable for banks and NBFCs. It also allows lenders to offer personalized propositions, enhance risk management through AI-driven underwriting, and scale via ecosystem partnerships.
The report emphasizes that banks and tech players must invest in modern, configurable tech stacks and cultivate strong merchant and third-party app provider (TPAP) partnerships to accelerate adoption.
According to Pine Labs, the next revolution in lending is beginning right at the checkout, with new credit products set to redefine how Indians shop and borrow.
By: Sandhya Bharti
