The National Payments Corporation of India (NPCI) has collaborated with payment aggregators such as Google Pay, Paytm, and Razorpay to allow credit card transactions over the Unified Payments Interface (UPI). This comes after the Reserve Bank of India (RBI) linked RuPay credit cards to UPI in an effort to combine the benefits of both, providing customers with the quick payment experience of UPI as well as the rewards and short-term credit provided by credit cards.
Customers no longer need to carry their credit cards with them when making transactions, thanks to the integration of RuPay credit cards with UPI. Before, UPI users could only access bank accounts, overdraft accounts, and savings accounts. This measure is expected to enhance credit-based payment acceptance because UPI’s network of asset-light UPI QR codes widens the locations where these payments can be accepted.
With over 250 million unique users and five crore merchants on the network, UPI has evolved into one of India's most inclusive payment systems. It is used to process real-time payments and can allow interbank transactions using a smartphone. Credit-based payment operations will rise by 16% each year over the next four years, according to the RBI Payments Vision for 2025.
The credit card-UPI linking announcement is expected to provide individuals and merchants with a hassle-free and smooth payments experience as India quickly adopts digital payments for day-to-day transactions. Customers will be able to enjoy the benefits of credit-based payments while making transactions over the UPI network, encouraging the adoption of digital payments in India even further.
