As fintech giants like Google Pay and PhonePe capture customer engagement, banks risk becoming invisible in India’s booming UPI economy. Fintech unicorn Zeta has released a blueprint offering 10 product-led innovations to help banks reclaim customer mindshare and monetise UPI transactions.
Zeta Services Inc., a SoftBank and Mastercard-backed fintech unicorn headquartered in Mumbai, India, operates in the banking technology and payments sector. The company provides cloud-native banking platforms, credit processing systems, and embedded finance solutions designed to modernize traditional banking infrastructure.
With Unified Payments Interface (UPI) emerging as India’s leading digital payments channel, banks have increasingly found themselves reduced to passive infrastructure providers. While they shoulder the costs of maintaining rails, platforms like Google Pay (GPay) and PhonePe capture customer loyalty, data, and monetisation opportunities.
In its new eBook, Reimagining UPI for Banks, Zeta has presented a 10-point roadmap aimed at helping banks transform UPI into a growth engine rather than just a payment switch. These innovations include:
- Smart UPI wallets
- Add-on UPI IDs
- Contextual “credit-on-tap”
- Merchant cash flow-based lending
According to Mehul Mistry, Global Head – Strategy & Products at Zeta, banks already hold trust, capital, and infrastructure but lack product imagination. The report calls on them to evolve from back-end providers to front-end experience owners in the digital financial ecosystem.
Data insights support this shift. Customers using RuPay credit cards linked to UPI recorded nearly three times more transactions (17–18 monthly) compared to traditional credit card users (5–6 monthly). Zeta believes this demonstrates the untapped potential for banks to integrate UPI natively into their own apps, layered with rewards, controls, and onboarding features.
Crucially, banks are losing access to the behavioural data generated through UPI, which fintech apps currently harness to drive product innovation, customer stickiness, and cross-selling. “Banks treat UPI as a switch, but it’s a goldmine of behavioural insights,” Mistry noted, adding that proper utilisation could reshape customer engagement.
Zeta is already collaborating with the country’s top four private banks, including HDFC Bank and ICICI Bank, and is powering the revamped HDFC PayZapp platform. These partnerships underline a growing recognition among banks that UPI must be repositioned as a strategic channel for revenue and customer loyalty.
The broader message is clear: UPI is no longer just a backend utility—it is the frontline of financial engagement. The next phase of competition in digital payments will not be determined by who owns the rails but by who controls the customer experience.
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