In partnership with various payment aggregators, the National Payments Corporation of India (NPCI) has also allowed credit card transactions on the UPI platform. This will help in providing customers with more alternatives for making UPI payments and will also benefit individuals who prefer using a credit card for online purchases. It is still not known and determined when the recent version will be available in UPI-based apps.
This new rule comes only days after the RBI enabled RuPay credit cards to be used with UPI. According to various sources, BharatPe, Cashfree Payments, Google Pay, Razorpay, Paytm, PayU, and Pine Labs have also agreed to allow customers to make payments using credit cards, which was previously not an option for the customers. The change will also allow customers to take advantage of the perks and benefits of short-term credit and credit card rewards.
Earlier people were just allowed to make transactions using bank accounts, overdraft accounts, and prepaid accounts. But now people have the option to make UPI transactions using their credit cards which will also help travelers to make payments without carrying the credit card.
UPI refers to the payment system which allows customers to transfer funds between the various banks quickly without the bank account details. UPI is a huge success with more than 8 billion transactions that take place every month.
The new rule of enabling credit cards for UPI transactions will boost the system of digital payments in India. Credit card transactions are majorly linked with higher ticket sizes which can further be used for many transactions. This will also help in giving customers more flexible choices for making payments which will also lead to a boost and the acceptability of digital payments in the country.
According to the sources, UPI payments are being used by over 250 million customers and 5 crore businesses. In January 2023, almost 8038.59 million transactions were performed using UPI, totaling Rs 1,299,058.78 crore. RBI anticipates that the new rule of adding credit cards will lead to a 16 percent increase in transaction volume in the coming next four years.
Nalin Bansal, NPCI’s Chief of Corporate and Fintech Relationships and Key Initiatives also added – “India is one of the few countries that has succeeded in promoting innovation through tailored laws. And, following the RBI’s decision to link RuPay credit cards to UPI, we immediately began assisting leading payment aggregators in increasing merchant acceptance and customer awareness in order to attract early and widespread adoption