Page 52 - Banking Finance July 2022

FEATURE

NOW, CREDIT

CARDS CAN BE

LINKED TO UPI

he Resirve Bank of India said that credit cards will grown payments system- RuPay and eventually other
T now be allowed to be linked to Unified Payments international players like Visa and Mastercard and elevate

Interface accounts as UPI has become the most
customer payments experience. Additionally, it will pave the
inclusive mode of payment in India. way for other geographies to adapt UPI much faster and
easier. RBI’s latest announcement for the extension of linking
"To begin with, the Rupay credit cards will be linked to the
UPI to credit cards is a great move towards the cashless
UPI platform. This will provide additional convenience to
economy," said Muralidharan Srinivasan, Head of Payments,
users and enhance the scope of digital payments," said RBI
APMEA Region, FIS.
Governor Shantiniketan Das.
UPI is becoming the default payment mechanism; the latest
Currently, Punjab National Bank (PNB), IDBI Bank (IDBI),
benchmark being Rs 10.4 lakh crore transactions processed
Union Bank, State Bank of India (SBI), Bank of Baroda,
through UPI in May 2022 and is expected to evolve into
Federal Bank and Saraswat Co-operative Bank provide the
many more embedded payments in the near future.
RuPay Credit Card.
As RBI Governor Shaktikanta Das noted, in May 2022 alone,
RuPay also provides co-brand cards with a few banks like
594.63 crore transactions amounting to Rs 10.40 lakh crore
HDFC Bank, SBI, PNB and Union Bank.
were processed through UPI.
Once the implindigenous RuPay credit card is linked, other
"UPI has become the most inclusive mode of payment in
card networks like Visa and Mastercard will follow suit. Up
India with over 26 crore unique users and five crore
until now, card users could only link their debit cards to UPI.
merchants on the platform. The progress of UPI in recent
At present, UPI facilitates transactions by linking savings/ years has been unparalleled. Many other countries are
current accounts through users’ debit cards. engaged with us in adopting similar methods in their
countries," RBI Governor Das said.
According to a norm that came into effect on January 1,
2020, UPI and RuPay attract zeroMDR ( merchant discount Unified Payments Interface (UPI) is a system that powers
rate), meaning no charges are applied to these transactions. multiple bank accounts into a single mobile application,
MDR is a fee charged to merchants for processing of merging several banking features, seamless fund routing &
payments made through UPI, digital wallets, debit, and merchant payments into one hood.
credit card.
On a month-on-month basis, the value of UPI transactions
Currently, credit cards attract the highest MDR between rose 5.9% in May and more than doubled from Rs 4.9 trillion
two and three percent. processed in May last year to Rs 10 trillion worth of
transactions in May 2022.
“Linking of credit card to UPI will further increase the usage
of UPI even for large ticket items as the users can have By adding a credit or to UPI apps, you can make payment
balanced option to choose how they can pay. Thus, it will without having to swipe the cards at POS machine. Just scan
widen the digital payments footprint in India, bolster a QR code and choose the added credit/debit card as
merchant partnerships of card networks starting with home- payment method to make the payment. (Source: BS)

52 | 2022 | JULY | BANKING FINANCE