Zeta turns focus back to India for credit on UPI service: CEO Turakhia

This follows an aggressive expansion period for the banking technology startup, when the company targeted entering 30 countries and newer verticals after raising its first institutional funding of $250 million from SoftBank Vision Fund 2 at a valuation of $1.45 billion in 2021.

"We have a razor-sharp focus on India. We concentrate on only one product and offering, which is digital credit-as-a-service," Turakhia said in an interview on the sidelines of the Global Fintech Fest in Mumbai. “Our focus is exclusively on all financial institutions to enable them to launch credit lines on UPI (Unified Payments Interface) using our platform. Everything from product and engineering to sales and go-to-market is 100% focused on this one opportunity in India."

Also Read: Can NPCI’s new UPI credit line be an alternative for entry level credit cards?

The Bengaluru-based company has a presence in Dubai, the UK, North America, Latin America, Europe and Asia. In 2021, the company shared plans to expand in eastern Europe, and in Southeast Asia, Japan and Africa by 2023. 

“We initially started in India and then shifted our focus to the US, where we secured several new contracts. This shift was partly because we were building our playbooks and delivery capacity along the way," he said. 

Turakhia said in that capacity, the company could not accommodate the growing contract volumes in both the US and India. During this period, Zeta built its digital credit-as-a-service stack and now plans to prioritise growth in this segment. The service allows users to access pre-approved credit through their UPI-linked accounts.

The Zeta chief said that with a separate team in the US, the company will continue its operations with a focus on credit cards and loan management systems.

Also Read: Zeta eyes presence in 30 countries in the next two fiscals

“Zeta is among the first ones to enter this (credit on UPI) segment, but there are more companies that are in the pipeline," said a fintech investor on the sidelines of GFF. “Credit on UPI is a great proposition as long as the underwriter is a regulated entity. While Zeta is taking one route, it will be exciting to see what new use-cases will come up."

Founded in April 2015 by serial entrepreneur Turakhia and Ramki Gaddipati, Zeta provides banks with the infrastructure to create digital products that enhance user experience. The company looks at four verticals - transaction card processing, core banking, loan management and digital banking.

Zeta’s India business reported an almost 33% increase in operating revenue to ₹816.20 crore in FY23, helping it swing to a profit of ₹21.94 crore from a loss of ₹20.7 crore in the year before. The company is yet to report its FY24 financials.

Plans with credit on UPI

Turakhia said Zeta plans to onboard a majority of banks approved by the National Payments Corporation of India, which operates retail payment and settlement systems including UPI, and the Reserve Bank of India to leverage credit lines on UPI.

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

Zeta will target NBFCs once the regulators open it up to this segment. The company recently announced a partnership with HDFC Bank to power its Credit Line on UPI (CLOU) offerings.

“While we've onboarded one bank in India for credit on UPI, they haven't launched yet. There's a planned launch process, and we're working towards its implementation," he said.

Mint reported earlier that Zeta estimates transaction volumes on this scheme will exceed $1 trillion by 2030 and aims to capture about half of this market.