The Reserve Bank of India has announced Unified Payments Interface or UPI-Credit Card linking that may benefit the card holders. The first to get the benefits will be the RuPay Card holders, says RBI Governor Shaktikanta Das on June 8. The aim to provide these services is to expand the score of digital payments to provide more convenience to the customers, the Governor further added.
UPI Transactions Limited To
As of now, UPI transactions are only made by liking debit cards, savings accounts, and current accounts. Having more than 26 Cr users, UPI has emerged as one of the most frequently used digital payment systems for small or mini amounts transactions. Last month, there was a total of 594.63 crore UPI transactions valued at Rs 10.40 lakh crore. To sustain and hype up the pace RBI has decided to add Credit Card linking as well, experts suggest.
How is The UPI-Credit Card Linking Will Benefit The Customers?
When the UPI payments transaction system was introduced users can only link their bank accounts, later after the successful start RBI allowed users to also link debit cards to pay through UPI.
However, from now on after the Governor’s announcement customers will be able to link UPI-Credit cards to make payments. Users can add credit cards to the famous UPI based payment applications Gpay, PhonePe, Paytm, etc. To debit money from credit cards, users will need to select a credit card as a payment option after QR code scanning.
chief executive officer of Finology Ventures, Pranjal Kamra said, “Being one of the convenient and hassle-free modes, UPI has become the most popular payment method. Now, with the new change, customers would get more options as well as convenience in making payment for various small and large bills.”
When Can You Use Credit Cards As UPI Payment Option?
As UPI and RuPay Network are ruled by the National Payments Corporation of India (NPCI), the UPI payment users having RuPay Credit Cards will be able to utilise the service before others. “This facility would be available after the required system development is complete. Necessary instructions will be issued to NPCI separately,” said the Central Bank. Users having other credit cards from other networks such as Visa or MasterCard will have to wait a little longer to facilitate this service.
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How Merchants Are Going To Be Benefitted By UPI-Credit Card Linking?
This answer was given by Junio, Co-Founder, and Ankit Gera. He said, “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.”
Note that the Central Bank has not yet announced the charges of using credit cards to make UPI payments. Banks and lenders may charge a nominal fee from the users.
