Now, RBI allows linking of credit cards on UPI platform
NEW DELHI: The Reserve Bank of India (RBI) on Wednesday allowed the linking of credit cards on the indigenously developed Unified Payments Interface (UPI) platform to provide a new money transaction option to 260 million users and 50 million merchants using UPI.
RBI governor Shaktikanta Das announced the decision while announcing policy rate hike to tame inflation. “At present, UPI facilitates transactions by linking savings/current accounts through users’ debit cards. It is now proposed to allow linking of credit cards on the UPI platform,” he said.
To begin with, Rupay credit cards, another indigenously developed payment mode, will be linked to the UPI platform, Das said. “This will provide additional convenience to users and enhance the scope of digital payments,” he said. In May 2022 alone, about 594 crore transactions amounting to ₹10.4 lakh crore were processed through UPI, he added.
“This is one of the initiatives of Prime Minister Narendra Modi’s Atmanirbhar Bharat [Self-reliant India] Mission as digital payments ecosystem is an essential part of ‘Digital India’ programme for efficiency, transparency and quality,” a government official said, asking not to be named.
According to official data, Bharat Interface for Money-unified Payments Interface (BHIMUPI) has become a preferred payment mode of the citizens as it achieved over 453 crore digital payment transactions with the value of ₹8.27 lakh crore till February 28 this year.
Akash Sinha,chief executive and co-founder of Cashfree Payments, called it an important step for enabling credit payments via UPI. “We believe that this will significantly contribute to the Digital India imperative. In May 2022, UPI processed more than ₹10 lakh crore worth of transactions, witnessing a doubled volume and value of transactions in a year’s time,” he said.
Commercial banks are, however, cautious. “RBI has made an interesting proposition to make credit cards available through the UPI network on Rupay-based credit cards. We don’t want to be optimistic on this development as the success of UPI has been its convenience on consumer side and high confidence to accept at the merchant side,” a note prepared by Kotak Institutional Equities said.