Pine Labs sees credit line on UPI as India’s next credit growth driver

Pine Labs’ latest industry report, supported by McKinsey, points to “credit line on UPI” (CLOU) as the big growth driver for credit-linked payments at checkout, as India’s lending landscape undergoes rapid changes.

India has 330 million credit-ready consumers but 150–200 million remain underserved, a gap that embedded credit products like CLOU aim to address. By 2030, the report estimates, credit-linked payment products could generate as much revenue as home and auto loans. The push will be led by UPI’s 65 million QR-enabled merchants and digital-native customer base, with 490 million consumers already on UPI.

Despite high awareness among the non-carded base, actual usage of products like BNPL or EMI on debit cards remains low, largely due to discoverability, acceptance, and trust issues. At present, consumers prefer credit options that are easy to access on familiar apps, simple to use, transparent, and widely accepted.

CLOU’s pitch is to leverage existing QR infrastructure for small-ticket credit, which unlocks viable lending economics for banks and NBFCs. The product will allow lenders to offer customized propositions, improve risk management through AI-led underwriting, and scale via ecosystem partnerships. 

The report also flags the need for banks and tech players to invest in configurable, modern tech stacks and develop strong merchant and TPAP (third-party app provider) partnerships for adoption.

The report further highlights that the next lending revolution is starting right at the checkout, with new credit products set to change the way Indians shop and borrow.