The main challenge in adopting the UPI credit line is consumer unfamiliarity with this new product. While UPI is widely used for instant payments, extending a credit line involves risk assessment and trust-building. Banks must educate users about the benefits and safeguards of credit lines to promote usage. There are certain concerns also about security and fraud which make some hesitant. Merchants too need time to integrate this option into their payment systems.
Another key issue is the lack of seamless integration of credit lines into the existing UPI infrastructure. Many users associate UPI with their bank balances may find the credit component confusing. Financial literacy around using credit responsibly also needs improvement to prevent over-borrowing. Without targeted campaigns and easy-to-understand explanations, the adoption of UPI credit lines will remain limited to a niche audience.
