Zeta launches new stack for banks to power credit transactions on UPI

Fintech startup Zeta, which builds technology backend for banks, has launched a new stack to support credit line-based transactions on Unified Payments Interface (UPI).

Zeta cofounder Bhavin Turakhia expects credit disbursals on UPI to touch a trillion dollars by 2030, and Zeta wants to process 50% of those transactions, he told ET. The firm will work as a technology service provider (TSP) for financial institutions.

The company wants to work with major banks who can offer this service to their consumers. By using their tech stack, banks can just focus on acquiring customers and underwriting. Beyond that, every kind of service from origination of the customer, management of the customer’s lifecycle, analytics and experience management can be managed by the Zeta team, he said.

“The growth of UPI has shown that all forms of credit, be it consumer loans, personal loans, EMI loans, everything will eventually come on UPI, we want to enable all such transactions,” Turakhia said.

Zeta, which has raised $340 million in equity funding from SoftBank, Sodexo and Mastercard, was last valued at $1.5 billion in 2022. While he’s not looking for fresh funding immediately, Turakhia said he will raise money only if there is a strategic partnership opportunity available.

Zeta is “set to achieve global break-even very shortly,” added cofounder Ramki Gadipatti.

The firm works with a bunch of lenders in the United States and some other geographies. In India, Zeta powers HDFC Bank’s PayZapp mobile application.

Gadipatti said that powering the PayZapp app was a major learning for the fintech startup since it had taken the contract at a time when the private sector lender was under the banking regulator’s scrutiny for digital banking issues.

“We have gone through regulatory audits twice in the meantime and it went through without any observations,” he added.