Using RuPay Credit Card On UPI? Pay Extra Charge Beyond Rs 2000 Transaction

A recent NPCI circular directed that no charge will be applicable for RuPay credit card use on Unified Payments Interface (UPI) for transactions up to Rs 2,000 in line with the RBI guidelines.

Using RuPay Credit Card On UPI? Pay Extra Charge Beyond Rs 2000 Transaction

How Does It Work?

When it comes to RuPay credit card, it has been operational for the last four years.

Now, all major banks are enabled and are issuing incremental cards for both commercial and retail segments.

Further, the circular dated October 4 said, “During credit card on-boarding on the apps, the device binding and UPI PIN setting process shall include and be construed as customer consent for credit card enablement for all types of transactions,”.

Moreover, the existing process from the app will apply to credit cards too in case of international transaction enablement, according to the National Payments Corporation of India (NPCI) as mentioned in the circular.

 For this category, Nil Merchant Discount Rate (MDR) would be applicable, up to the transaction amount less than and equal to Rs 2,000, the circular noted. 

Here MDR refers to the cost paid by a merchant to a bank for accepting payment from their customers via credit or debit cards every time a card is used for payments in their stores. 

Similarly, the merchant discount rate is expressed in the percentage of the transaction amount.

Wider Choice Of Payments

It is noteworthy here that “This circular is applicable from the issuance date and members are requested to take note and bring the contents of this circular to the notice of the relevant stakeholders,”.

The Reserve Bank Deputy Governor T Rabi Sankar said, “the basic objective of linking credit cards to UPI is to provide a customer with a wider choice of payments. Currently, UPI is linked through debit cards to savings accounts or current accounts,”.

The use of UPI apps would ensure complete transparency on transactions made by a customer using a credit card, by means of easily accessible transaction history and clearly visible user interface while making the payment, the circular noted.

The circular said that during each event of the credit card lifecycle for such transactions, the credit card issuers and apps will send appropriate notifications or communications to the customer. 

This move is expected to promote the homegrown payment gateway and encourage wider acceptance of RuPay cards.

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