Unified Payments Interface (UPI) has been a revolution for the Indian economy as this simple system allows for direct payment from one bank account to another in mere seconds. UPI managed to reach over 1 billion transactions per month in 2019, just 3 years after its inception in 2016 and the next 1 billion transactions came within the next year. So UPI managed to make 2 billion transactions per month in under 4 years. It reached the 3 billion transactions per month mark in just under 10 months. Then, only 3 months later, UPI reached the 4 billion transactions per month mark. Recently, in March of 2022, it crossed the 5 billion transactions per month mark. These simple statistics are enough to elaborate just how engrossed UPI has gotten into every Indian’s life. With the latest announcement by the RBI, this rise is gonna be even more exponential and significant. Continue reading to better understand everything about it.

RBI allows credit cards to be linked to UPI

On June 8th, 2022, RBI announced that credit cards can now be linked to UPI for direct payments. Prior to this, Debit cards were the only source to make payments through UPI. With this announcement, consumers will be able to link their credit cards with all their favourite payment applications such as Google Pay, Phone Pe, Bharat Pe, Paytm, etc. The aim of this linkage is to provide more convenience to the customers and enhance the scope of digital payments.

This new credit card linking will begin with the RuPay credit card but is expected to reach all the major credit cards soon enough. Once the credit cards are linked to your UPI, you will receive an option to choose the mode of payment you would like to make each of your transactions with, be it your debit card or credit card.

As of now, RBI is yet to announce if there will be a credit card to UPI transfer charges when the payment is made via a Credit card but it is believed that there will be a nominal charge since all the major platforms such as Paytm and PhonePe have recently started charging a convenience fee on mobile recharges even for UPI payments made by a debit card.

How will this linking model change Indian Economics?

“In order to further deepen the reach and usage, it is proposed to allow linking of credit cards to UPI. To start with, Rupay credit cards will be enabled with this facility. This arrangement is expected to provide more avenues and convenience to the customers in making payments through the UPI platform,” the RBI Governor said in a statement.

UPI is the most popular payment method. This new Credit card linking model is believed to rapidly accelerate the trend of digital transactions which are made all over India. Experts believe that the linkage of credit cards to UPI will be extremely beneficial for merchants, especially smaller merchants. As this is an extremely consumer friendly notion, it is expected to benefit both the merchants and the big payment platforms which will be able to make use of it. 

This will provide the consumers with a hassle-free mode of payment with even more options than before which can lead to a boom in monthly UPI transactions. Currently, UPI transactions all over India are firmly set at 5 billion transactions a month, but experts believe that with this new linking model, 5 billion UPI transactions will happen on a daily basis in the next 3-5 years.

How to Make UPI Payments Using Credit Card

To begin your UPI payments journey using a Credit Card, you will need to have a RuPay credit card as that is the first credit card to be allowed this new feature. But other major credit card providers like VISA and MASTERCARD should receive this feature very soon.

To link your Credit Card with UPI payments, follow these simple steps:

  1. Open your payment app. This feature is not limited to any particular payment app so it can be linked with every payment app.
  2. Click on your profile picture.
  3. Under it, select the payment methods section.
  4. There you should see the “Add Credit/Debit Cards” option.
  5. Here, Enter the card details as requested by the app, such as credit card number, valid up to date, CVV, and cardholder’s name.
  6. Once these details are entered, click on save.
  7. With this, your credit card is linked to your UPI payment.

Now, every time you begin a transaction, you will be presented an option to pay via your app wallet, debit card, or your credit card.

Make UPI Payments Using SBI Credit Card

To make UPI payments using your SBI Credit Card use the following steps:

  1. Go to the Payment channel on the SBI Card/Mobile App to get started.
  2. Choose your UPI option after entering your SBI credit card number and the amount you want to pay.
  3. The page will redirect you to the UPI page. Now choose either ‘Enter your VPA’ or ‘Scan QR code’ as per your preference.
  4. Depending on your choice, enter your VPA or scan the QR code with any UPI app.
  5. After confirming the amount, authorise the payment.
  6. Another confirmation will be shown. Approve it.
  7. Your payment has been made, now it will be posted on the credit card account.

Make UPI Payments Using HDFC Credit Card

  1. On the Mobile Banking app select ‘BHIM UPI Payment’.
  2. Type in your 6-digit App password to enter.
  3. Choose ‘Send Money’.
  4. Now, choose to pay via the UPI ID of the beneficiary accounts number and IFSC code.
  5. Next, you will have to enter your mobile number and MMID.
  6. Enter the amount.
  7. Type in your 4-digit UPI PIN to make the payment.
  8. Approve the confirmation and your payment will be made.

Make UPI Payments Using Axis Bank Credit Card

  1. Initiate your UPI payment from any UPI app of your preference.
  2. Enter the UPI ID for the Axis Bank Credit Card bill.
  3. Make sure to verify the name before entering the credit card bill amount.
  4. Now, use your UPI pin to complete the transaction after double-checking the amount.

Make UPI Payments Using Punjab National Bank Credit Card

  1. After adding your bank account to the app, generate a virtual permanent address and set up your UPI pin to authenticate your transactions.
  2. Click on Pay.
  3. If you want to use a Virtual Address, enter the virtual address of your UPI-enabled beneficiary.
  4. Enter the bank account data and complete the transaction like normal if you want to use an IFSC code.

FAQs

  1. Is there a separate credit card UPI app?

No, a separate credit card UPI app does not exist as the linking of credit cards will be available on all the existing major payment platforms such as Paytm, Phone Pe, Google Pay, etc. 

  1. What is a VPA?

A VPA (Virtual Permanent Address), also known as a Virtual ID and most commonly known as a UPI ID is a unique identifier that represents your account. It is created automatically after you start using any UPI app. VPA allows you to make all transactions securely through any UPI platform. VPAs are unique and you can link only one bank account with every VPA. The VPA is generally in the following format, name@bankname or mobilenumber@bankname.

  1. Why is the RuPay credit card the first card to be linked?

As UPI and RuPay credit cards both are made by the RBI-promoted National Payments Corporation of India (NPCI). It is the RuPay credit card that is first in line to be linked but it will reach other credit cards soon enough.

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