UPI-Credit Card Linking: Which Users Can Link UPI With Credit Card? Charges? (Get Complete Information)

UPI-Credit Card Linking: Which Users Can Link UPI With Credit Card? Charges? (Get Complete Information)
UPI-Credit Card Linking: Which Users Can Link UPI With Credit Card? Charges? (Get Complete Information)

On Wednesday, users have been allowed to link their credit cards to Unified Payments Interface (UPI) platforms by the Reserve Bank of India (RBI). 

The governor of RBI, Shaktikanta Das announced on June 8 that the bank will begin this facility with the indigenous RuPay credit card. More convenience as well as enhanced scope of digital payments is the aim of this.

In order to facilitate UPI transactions, as of today consumers can use their savings accounts, current accounts and debit card. UPI, with 26 crore users, has emerged as one of the most popular payment systems in the recent times.

A total of 594.63 crore transactions amounting to Rs 10.40 lakh crore were processed last month through UPI.To continue this momentum, RBI has decided to include credit card option in UPI, believe experts.

Can you Use your Credit Card for UPI Transactions?

At first, only the RuPay credit card users, will be able to link their cards to UPI platforms. It must be noted that both the RuPay network and UPI are managed by the National Payments Corporation of India (NPCI). “This facility would be available after the required system development is complete. Necessary instructions will be issued to NPCI separately,” the central bank said in a statement.

Individuals with other credit cards such as Visa or MasterCard, will have to wait a little longer to use this new facility.

How This Move Will Benefit Users?

During the inception, it was only at the bank’s end that UPI payments could be done. However, later on the users were allowed to add debit cards to make payments.

Credit cards can also be linked to the UPI applications such as Google Pay, Paytm, PhonePe and others. Users need to scan the QR code and choose credit card as the payment mode, once the credit cards are linked. Using credit limit for UPI transactions has been limited to very few applications and banks. RBI, in its latest announcement, has made the UPI through credit facility open to all the players.

Pranjal Kamra, CEO, Finology Ventures said that UPI has become the most popular payment method due to its convenient and hassle-free modes. Customers would get more options as well as convenience in making payment for various small and large bills now that the new change is incorporated.

For small merchants, the linkage of UPI and credit cards will also be extremely beneficial, as per the experts. 

Ankit Gera, Co-founder, Junio said that “Along with being an extremely consumer friendly development, this will also benefit the small merchants as well as the largest UPI acquirers such as PhonePe, Paytm, BharatPe etc. Cards can now effectively be used to pay at the ubiquitous QR codes, and the need for the expensive POS machines will not be there anymore”.

No charges to use credit cards for UPI payments have been announced by the central bank. However, banks or small lenders could charge a nominal fee for linking credit cards to UPI platforms.

For payments through UPI, the Merchant Discount Rate or MDR has been capped at zero. It is a fee that is charged by the bank for accepting payments from their customers via credit and debit cards. It will be interesting to what charges a merchant must pay for using credit cards via UPI, Gera added.

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