Fintech
Fintech Unicorn Zeta launches UPI integrated credit
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Zeta, a unicorn in banking technology, has launched a digital credit-as-a-service solution for banks. The product leverages the network to accelerate credit issuance in India and is based on the NPCI credit facility under the UPI scheme.
What is Zeta?
Zeta is a banking technology company revolutionizing how core banking systems work. “We are a modern, cloud-native stack that ensures banks are able to operate at any scale for the future and today, and ensures we can meet the growing demands and consumer-centricity that banks need to meet. it is what Zita would do, or Zita does, for the bank,” said Ramki Gaddipati, CEO APAC and Global CTO.
The company expects that by 2030 the system’s transaction volume will exceed $1 trillion. With its solution, it hopes to capture 50% of this market and help banks quickly develop and introduce credit products.
What is UPI’s involvement with Zeta?
“Today we are talking to bankers and the ecosystem about what is possible with the credit line on UPI, the new product that the NPC ecosystem has announced. NPCI has announced and RBI has blessed in the latest GFF,” he explained Gaddipati. “Zita was a technology company with a great passion for enabling access to credit for everyone, making banking possible for everyone. And we felt that, okay, this is a great, great possibility, that possibility of change of paradigm that the bank and the ecosystem should achieve, and this is what we are trying to do through this event,” he added. Additionally, the pricing for the new Zeta product will vary depending on the specific services required by each bank.
He added: “We have seen UPI volumes put a strain on core banking systems. We expect similar line of credit volumes on UPI soon, and this requires a population-scale banking infrastructure capable of processing hundreds of millions of credit accounts “.
Fears during the introduction of a new technology in the banking sector.
The banking space is known for being quite faithful to their systems and, at times, almost treats them like traditions. “We felt that change was inevitable. Okay, so all the legacy systems will have to be replaced someday. They need to be retired because most of these systems were built before I was even born, and most of us were born. We have embraced technology far beyond what we could have imagined 40 years ago and by virtue of which we each carry more computers with us and consume so many digital services, including banking services, most banking systems were never conceived of for this world, so we were very confident that banks would realize the need for change and do it,” Gaddipati said.
“The only question is, do they have a credible alternative? Do they have a reliable alternative? That’s the question. And I think we’ve been able to establish Zeta as one of these players. They could trust, they could trust the whole business that they do their current systems, central processing systems,” he added.
What is the future of the banking sector?
“So I think UPI has so many ways to influence us, so many ways for us to see transactions, payments in a completely transparent and ubiquitous way. Today UPI is still extremely mobile oriented. UPI 4.0 will say it’s without form. Authentication mechanisms will change. You may just authenticate to UPI in many ways in the coming days, and you should be able to embed UPI into many, many devices. Many systems and interactions that we do will be seamlessly integrated into UPI, where you are identified,. you will be authenticated seamlessly in your journey of any business. It is simply an element of the roadmap.”
Zeta, founded in 2015 by Gaddipati and Bhavin Turakhia, provides financial institutions with an omni-stack platform for fraud and risk management, debit and credit card processing and issuing, and lending. Zeta’s next-generation, cloud-native core banking and payments platform powers its extensive services and technology stack, which enables banks to manage digital credit operations from originations to collections. This is known as a digital credit-as-a-service offering.
In contrast to a loss of INR 20.7 Cr in FY22, the company declared a profit after tax (PAT) of INR 21.94 Cr in FY2022-2023 (FY23). The Bengaluru-based fintech unicorn reported an increase in revenue from operations by around 33% to INR 816.20 Cr in FY23, up from INR 615.05 Cr in FY22.
Zeta became a unicorn in May 2021 after raising $340 million in total capital in a $250 million funding round led by Masayoshi Son’s SoftBank. Among its supporters are well-known companies such as Mastercard, Sodexo and Softbank Vision Fund.