The National Payments Corporation of India (NPCI) has teamed up with payment aggregators including Google Pay, Paytm, and Razorpay to support credit transactions on Unified Payments Interface (UPI). This comes after the Reserve Bank of India (RBI) linked RuPay credit cards to UPI in a bid to combine the benefits of both, offering customers instant payment experience of UPI with the rewards and short-term credit offered by credit cards.
Due to the integration of RuPay credit cards with UPI, customers are no longer required to take their credit cards around with them when making purchases. Prior to this, only bank accounts, overdraft accounts, and savings accounts were available to UPI users. This action is anticipated to increase the acceptance of credit-based payments because UPI's network of asset-light UPI QR codes expands the places of acceptance for these payments, which is advantageous for businesses in semi-urban areas where card point-of-sale terminals are less common.
The RBI's decision to link RuPay credit cards to UPI was announced, and according to Nalin Bansal, Chief of Corporate and Fintech Relationships and Key Initiatives at NPCI, "we immediately started enabling leading payment aggregators to boost merchant acceptance and customer awareness in a bid to attract early and widespread adoption."
UPI has developed into one of the most inclusive payment systems in India, with over 250 million unique users and five crore merchants on the network. It is used to handle payments in real-time and can facilitate interbank transactions using a smartphone. The RBI Payments Vision for 2025 predicts that over the next four years, credit-based payment operations will increase by 16 per cent annually.
The credit card-UPI linkage announcement is expected to provide access to a hassle-free and smooth payments experience for individuals and merchants alike as India rapidly adopts digital payments for day-to-day transactions. The move will allow customers to enjoy the benefits of credit-based payments while making transactions through the UPI network, further promoting the adoption of digital payments in India.
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