Fintech start-up Cred, known as a unicorn for its valuation of $6.5 billion, has announced that it is now facilitating peer-to-peer unified payments interface (UPI) transactions.

Cred, which originally started as a credit card payments platform in 2018, has been expanding its services and recently launched Scan and Pay, allowing members to make payments through UPI at various offline and online merchant locations, as well as for bill payments.

Cred's move into the UPI ecosystem puts it in competition with major players like Walmart-owned PhonePe and Google Pay, which currently dominate the market with a reported combined share of roughly 85 per cent, while Paytm holds around 10 per cent of the market. Cred's entry into UPI transactions could potentially disrupt the market and offer more choices for consumers.

Cred's expansion into different areas of financial services, including payments, lending, investment and commerce, has been supported by investments from venture capital firms Sequoia and Tiger Global. However, Cred's financial performance has seen some challenges, with losses increasing by 144 per cent to Rs 1,279 crore (approximately £128 million) in the fiscal year 2022 (FY22), while revenue increased by 312 per cent to Rs 393 crore (approximately £39 million). It remains to be seen how Cred will effectively monetise its various services and cross-sell to its user base.

Cred's founder, serial entrepreneur Kunal Shah, has previously mentioned his vision of building Cred as a super app, with different services being introduced gradually, akin to characters in a web series. This approach aims to avoid overwhelming users with too many options at once, as opposed to other companies that attempt to be a "buffet at a rich wedding" with a wide range of services that may be difficult for users to navigate and understand.

Cred's expansion into UPI transactions is seen as a strategic move to offer its members more payment options and enhance its position as a comprehensive financial services platform. By leveraging UPI, which is widely used in India for various financial transactions, Cred aims to tap into the growing digital payments market and gain a larger share of the market currently dominated by PhonePe and Google Pay.