Beyond Free Transactions: How Flipkart’s Super.money is Building a Business on India’s UPI Revolution 

In response to the profitability challenge posed by India’s free UPI payment system, Flipkart’s Super.money has partnered with Kotak Mahindra Bank to pioneer a new fintech model that uses UPI not as a revenue source but as a customer acquisition gateway.

Their strategy centers on a “3-in-1 Super Account” that bundles a savings account and a fixed-deposit-backed secured credit card with UPI payments, thereby targeting first-time borrowers and reintroducing incentivized spending through card-based merchant fees. This allows Super.money to monetize its user base by cross-selling high-margin financial products like personal loans and building toward a future “buy now, pay later” commerce ecosystem, effectively creating a sustainable business by layering paid services on top of the free public payments infrastructure.

Beyond Free Transactions: How Flipkart’s Super.money is Building a Business on India’s UPI Revolution 

India’s digital payment landscape has been fundamentally reshaped by the Unified Payments Interface (UPI). It’s a world-class, government-backed system that made instant bank transfers free and ubiquitous, processing a staggering 19 billion transactions a month. But this very success has created a paradox: if payments are free, how do fintech companies built on them actually make money? 

This is the multi-billion-dollar question haunting the industry, and Flipkart’s fintech arm, Super.money, believes it has found a compelling answer. Its recently announced partnership with Kotak811, the digital banking arm of Kotak Mahindra Bank, isn’t just another tie-up; it’s a strategic blueprint for building a profitable business on top of a free public utility. 

The UPI Profitability Puzzle 

To understand Super.money’s gambit, one must first appreciate the constraints of the UPI ecosystem. Regulators, including the Indian finance ministry, have steadfastly refused to allow merchant discount rates (MDR)—the small fees typically charged to merchants for processing digital payments. This MDR revenue is the lifeblood that funds the rewards, cashbacks, and credit programs that fuel consumer loyalty in other parts of the world. 

Without MDR, UPI is a phenomenal public good but a challenging commercial product. Fintechs are left with a massive user base engaging in countless transactions, but with no direct way to monetize that activity. They are, in essence, acquiring customers with a product that cannot, by itself, pay for their acquisition cost or generate profit. 

Super.money’s CEO, Prakash Sikaria, succinctly framed their strategy: “We do UPI not to solve the pure payment use case. We do UPI to build an interesting cross-financial services play where we are acquiring and retaining customers with the UPI.” 

This single sentence reveals their entire philosophy: UPI is not the destination; it’s the gateway. 

The “3-in-1 Super Account”: A Bundled Solution for a Fragmented Market 

The centerpiece of the Kotak811 partnership is the “3-in-1 Super Account.” This isn’t just a payments wallet; it’s a bundled financial ecosystem designed to solve multiple user needs simultaneously while creating multiple revenue streams for Super.money. 

The account combines: 

• A Savings Account: Provided by Kotak Mahindra Bank, offering the safety and interest rates of a regulated banking entity. 

• UPI Payments: The free, familiar utility that serves as the primary engagement hook. 

• A Secured Credit Card: This is the masterstroke. The card is backed by a fixed deposit (FD) starting as low as ₹1,000 (~$11). This FD acts as collateral, mitigating risk for the bank and allowing them to extend credit without requiring traditional income proof. 

This bundle is strategically brilliant for several reasons: 

• Unlocks Credit for the Unbanked: By targeting secured credit, Super.money is going after a massive, underserved market—first-time borrowers and those with thin or no credit files. The company aims to issue 2 million secured cards in the next 12 months, with a staggering 60% going to first-time borrowers. This builds credit history for users and creates a long-term, valuable customer for Super.money. 

• Reintroduces Incentives: The secured card earns standard MDR from merchant transactions. Since it’s a card and not a pure UPI transaction, this revenue is permissible. This income funds the cashbacks and rewards that the core UPI system cannot support, making the Super.money ecosystem more attractive than a standalone UPI app. 

• Creates a Valuable Data Moat: By observing how users save, spend, and manage their secured credit line, Super.money gathers rich data on financial behavior. This allows for hyper-personalized upselling of higher-margin products like personal loans, which already constitute 80% of their revenue. 

The Dual-Engine Monetization Machine 

Super.money is not relying on a single trick. Sikaria outlines a clear, two-pronged strategy for growth and profitability: 

• The Financial Services Engine: This is the core revenue driver today. It includes: 

• Personal Loans: The high-margin flagship product. 

• Secured Cards: Generating revenue through acquisition fees from the partner bank and a share of the MDR. 

• Deposits: Strengthening the banking partnership and user lock-in. 

• The Commerce Engine: This is the future growth vector, directly leveraging Flipkart’s e-commerce DNA. The plan is to introduce a Klarna-style “pay-in-three” model within the Super.money ecosystem. By integrating a one-click checkout solution (like their recent partnership with Juspay) and offering “Buy Now, Pay Later” (BNPL) at merchants—starting with Flipkart’s own network and D2C brands—they create a financial overlay on top of everyday shopping. 

This dual-engine approach transforms Super.money from a mere payment app into a comprehensive financial and commerce platform. 

Strategic Focus: Depth Over Breadth 

In a market dominated by giants like Google Pay and PhonePe that chase user numbers in the hundreds of millions, Super.money is taking a contrarian approach. They are deliberately focusing on the “top 10 million to 30 million users” in India—a segment with a higher propensity to transact and engage with financial products. 

This is a quality-over-quantity strategy. Instead of burning cash to acquire every user possible, they are using UPI as a filter to attract users who are likely to graduate to loans, cards, and BNPL. As Sikaria bluntly stated, for users who only want UPI payments, “we do not want to serve them.” 

This focused acquisition strategy is reflected in their impressive metrics: 10 million active users, 85% retention, and a significant majority of transactions coming from users under 30. They are building a formidable, engaged community, not just a large, passive user base. 

The Road Ahead: Capital, Competition, and Consolidation 

Launched just in June 2024, Super.money is already a force to be reckoned with. With an annualized revenue run rate of ~$36 million and a place among India’s top five UPI platforms, it has momentum. The $50 million seed investment from Flipkart provides a strong foundation, but as Sikaria admits, “We need more capital for at least a couple of years.” 

The upcoming fundraise will be a key test. Will Flipkart continue to bankroll its fintech champion alone, or will it bring in external investors to share the risk and accelerate growth? The inbound investor interest suggests the latter is likely. 

The broader implication of Super.money’s model is that it provides a viable template for the entire Indian fintech sector. The era of burning venture capital to win the UPI volume race is over. The new playbook is about leveraging UPI for low-cost customer acquisition and then layering on regulated, high-margin financial products to build a sustainable, profitable business. 

The partnership between a agile fintech (Super.money) and a established, regulated bank (Kotak) is also a sign of the times. It’s a symbiotic relationship: the bank gets access to a young, digital-native customer base, and the fintech gets the regulatory umbrella and infrastructure needed to offer complex financial products. 

The race is no longer about who processes the most UPI transactions. The real race is about who can most effectively convert those transactions into trusted, profitable, and long-term financial relationships. With its strategic partnership with Kotak811, Super.money has just taken a significant lead.