Credit cards to be linked to UPI

The RBI has proposed linking of credit cards with UPI, starting with linkage to RuPay credit cards.

According to the central bank, the Unified Payment Interface, or UPI, has become the most inclusive mode of payment in India with over

26 crore unique users and

5 crore merchants onboarded on the platform. In May 2022 alone,

594.63 crore transactions amounting to Rs 10.40 lakh crore were processed through UPI.

"UPI currently facilitates transactions by linking savings or current accounts through debit cards. The interoperability of prepaid payment instruments (PPIs) has also facilitated access of PPIs to the UPI payment system for undertaking transactions. In order to further deepen the reach and usage, it is proposed to allow linking of credit cards to UPI," the central bank said. To begin with, Rupay credit cards will be enabled with this facility.

According to Pranay Jhaveri, MD, India and South Asia, Euronet Worldwide, RuPay credit cards will add credit line facility to UPI.

"Having a choice of payment benefits both the merchant and the customer, as now the UPI payment can be done using a RuPay credit card without the merchant having a card-enabled POS terminal. The user needs to scan the QR code and can now choose RuPay credit card as the payment mode. While software changes will be required at the front end and back end, we are optimistic that this support will be available to the general public very soon," he said.

Rupesh Nambiar, CFO of Global PayEX, says this must be seen in the context of several countries, such as Nepal and Singapore linking UPI to their digital payments framework.

"By linking credit cards as well as the digital payments network of other countries to the UPI platform, we will witness a surge in the number and in the volume of transactions processed,' he said.