Credit for the next 50 crore: How PhonePe’s new co-branded cards target India’s underserved

At the Global Fintech Fest (GFF) 2026 in Mumbai, PhonePe unveiled a suite of co-branded credit cards with HDFC Bank and SBI, plus the Wishcard for thin-file consumers.The products are designed around spending habits that have emerged in the UPI era, linking everyday digital payments with formal credit. “Unlocking credit for all” is one of the key pillars of the company’s vision going forward, as articulated at GFF.

This push comes as India’s credit market is expanding beyond its traditional urban base. India’s credit card market has grown sharply over the past decade, with the number of credit cards reaching 5.2 crore in 2026, up 3.6 times from 1.4 crore in 2016, according to TransUnion CIBIL. Yet half of new-to-credit card consumers in 2026 were Gen Z, aged 30 years or below, and 46 per cent resided in semi-urban and rural markets, indicating that the centre of gravity is shifting beyond metros. Large segments, including Gen Z students, homemakers, freelance professionals, and small traders, often lack the documented income or credit history needed to qualify for mainstream cards. PhonePe’s credit lineup is designed to meet them where they are.

The PhonePe credit stack: Three cards, three audiences

PhonePe’s new credit lineup consists of co-branded cards with HDFC Bank and SBI, plus the Wishcard, which is explicitly designed for consumers with limited or no credit history. All three are integrated into the PhonePe app, leveraging the company’s distribution among hundreds of millions of users and millions of merchants.


The PhonePe-HDFC Bank credit card is a RuPay product available in two variants, Ultimo and Uno. Both are built around everyday spending via UPI and within the PhonePe ecosystem, with rewards denominated in HDFC reward points that can be redeemed at a 1:1 value against statement credit.

Ultimo is the premium HDFC variant. It offers 10 per cent reward points on eligible spends within the PhonePe app, five per cent on eligible online merchant spends and one per cent on UPI Scan and Pay transactions, subject to the applicable monthly caps. It also offers eight complimentary domestic airport lounge visits, subject to the required spending criteria. Uno is the more accessible variant, offering two per cent reward points on eligible PhonePe spends, one per cent on online merchant spends and one per cent on UPI Scan and Pay transactions, again subject to monthly caps. The distinction is straightforward: Ultimo offers a richer rewards proposition for higher or more frequent spending, while Uno is positioned as the more accessible entry point into the same ecosystem.

The PhonePe-SBI Card follows a similar two-tier structure, with Select Black positioned as the premium variant and Purple as the more mass-market offering. Both are available on RuPay and Visa, and the customer journey—from onboarding to account management—is handled digitally through the PhonePe app.

Select Black offers 10 per cent reward points on eligible spends within the PhonePe app, subject to monthly caps, five per cent on other eligible online spends and one per cent on UPI and other spends. It also comes with four complimentary domestic airport lounge visits a year, along with welcome vouchers and fee-waiver milestones tied to spending thresholds. Purple has a lower earn rate: three per cent on eligible PhonePe transactions, two per cent on select online spends and one per cent on UPI and other spends. Recent rule changes by SBI Card have introduced tighter monthly caps on reward points for PhonePe and online spends, particularly for Select Black, but the core proposition remains centred on higher rewards for in-app and online spending.

The most distinctive product in the lineup is the Wishcard, explicitly pitched as a solution for underserved segments, including Gen Z, homemakers and freelance professionals with limited or no credit history.

The Wishcard is linked to a fixed deposit that can start from as little as ₹2,000. This structure serves two purposes: users can earn interest on the fixed deposit (FD) while using the card for everyday spending, and the card gives them a route to establish a formal credit history because the activity is reported to credit bureaus.

In rewards terms, the Wishcard offers three per cent value back on high-frequency PhonePe transactions and one per cent on UPI Scan and Pay and certain premier e-commerce merchants.

For consumers who have traditionally been excluded from mainstream credit because of irregular income, limited documentation or simply a lack of prior credit exposure, the Wishcard is designed to make that entry point more gradual. A small FD becomes the starting point for a formal credit relationship, rather than requiring an established credit history upfront. Given that 46 per cent of new-to-credit consumers now reside in semi-urban and rural markets, products of this kind could help widen the credit base beyond salaried, metro-based consumers.

Embedding credit into India’s digital behaviour

PhonePe’s credit strategy is to be woven into existing digital behaviour. Instead of asking users to adopt a new payments habit, the company is layering credit on top of behaviours that are already ubiquitous: paying via UPI, recharging phones, settling utility bills, booking travel, and shopping online.

India’s payments culture has been fundamentally reshaped by UPI. With more than 24,162 crore transactions annually and UPI accounting for about 85 per cent of digital payments by volume, the typical Indian digital payer is already comfortable with QR scans, VPAs, and app-based flows. PhonePe is betting that the familiarity consumers have developed with UPI can serve as an entry point into formal credit products.

From an industry perspective, this is a template for how credit can scale in a UPI-first economy. Traditional credit cards were built for swipes and online gateways; PhonePe’s co-branded cards are built for scan-and-pay, in-app spends, and micro-transactions. The design of these products reflects a broader industry view that future credit growth will increasingly come from younger consumers and non-metro markets rather than traditional urban cardholders.

The challenge of reaching first-time borrowers

The inclusion angle is explicit in PhonePe’s messaging. “Unlocking credit for all” is one of the key pillars of the company’s vision going forward, as articulated at GFF 2026. The product architecture supports that claim in three ways.

First, the Wishcard’s FD-backed model lowers the barrier to entry, enabling users with no prior credit history to start building one with a small, manageable deposit. This is particularly relevant for homemakers, students, and freelancers who may not have conventional income proofs but can mobilise small savings.

Second, by offering elevated rewards on PhonePe app spends and UPI transactions, the cards incentivise formal digital payments among users who might otherwise rely on cash for small-ticket transactions. Over time, this can improve transaction visibility for both consumers and merchants, aiding credit underwriting and financial planning.

Third, the entire lifecycle, from application to statement viewing to repayment, is handled within the PhonePe app. For semi-urban and rural users, this reduces friction and the need to visit branches, aligning with the broader trend of app-first financial services.

TransUnion CIBIL’s data showing that half of new-to-credit consumers are Gen Z and nearly half reside beyond metros underscores the timing: there is a large, growing cohort of young, non-metro users ready to enter the credit system if the products meet them where they are. PhonePe’s cards, particularly Wishcard, are structured to do exactly that.

From payments to a broader financial platform

PhonePe’s credit push must be read in the context of its broader evolution. From a UPI-focused payments app launched in 2016, the company has grown into a financial services platform that processes a substantial share of India’s daily digital transactions and serves hundreds of millions of users and millions of merchants. It has used that payments foothold to expand into insurance, investments, lending, and commerce, effectively becoming a distribution layer for financial products.

At GFF 2026, PhonePe CEO Sameer Nigam outlined a decade-long roadmap that emphasises AI-powered credit disbursals, micro-investments starting at ₹10, and deeper inclusion for feature-phone users and small businesses. The credit card suite, HDFC, SBI, and Wishcard, is a central piece of that plan, converting PhonePe’s transactional relationships into formal credit relationships.

For the industry, this signals a shift from payments as a standalone to payments as the entry point to a full-stack financial relationship. In a market where consumers generally do not pay directly for UPI transactions, credit also gives fintech platforms a route to build deeper commercial relationships with their user bases.

What this means for India’s digital economy

PhonePe’s GFF announcements, including feature-phone UPI and a triad of credit cards, seek to tap into the two remaining frontiers of India’s digital finance story: access and credit.

On the access side, UPI 123Pay for feature phones acknowledges that smartphone penetration, while improving, is not universal, especially among older, rural, and female populations. By enabling UPI over SMS on widely available handsets from HMD, Nokia, Lava and itel, PhonePe is extending the public payments rail to users who have so far been on its margins.

On the credit side, the HDFC, SBI and Wishcard products aim to convert India’s UPI-era payment behaviour into formal credit relationships, with rewards structures that reflect how people actually spend, and a dedicated product for those who have been historically excluded from credit. In a country where credit card ownership is still under 5.2 crore but growing fastest among Gen Z and non-metro consumers, this is where the next wave of inclusion will come from.

The first decade of India’s digital finance story was defined by access to payments. The next phase is likely to be defined by access to credit, particularly for consumers who have participated in the digital economy but remain outside the formal lending system. PhonePe’s latest endevaours are an attempt to position the company at the centre of that transition