Leading Payment Gateways Introduce Credit Card Option on UPI

The National Payments Corporation of India (NPCI), in collaboration with payment aggregators, has enabled credit card transactions on the UPI platform, a development that is expected to revolutionize the way people make payments through the system. Users will have more options to make UPI payments more easily as a result, which will benefit those who favour using a credit card for online purchases.

Credit card transactions on UPI

Nalin Bansal, Chief of Corporate and Fintech Relationships and Key Initiatives, NPCI, said, "India is one of the select few nations that has been successful in premiering innovation through targeted regulations. And after the RBI’s decision to start linking RuPay credit cards to UPI, we immediately started enabling leading payment aggregators to boost merchant acceptance and customer awareness in a bid to attract early and widespread adoption"

The most recent decision on credit card payment introduction on UPI was made shortly after RBI enabled RuPay credit cards for UPI. This Intiative of the government aims to give users a UPI instant payment experience while also providing them with the advantages of short-term credit and credit card rewards.

Prior to this action of RBI Users of UPI were only able conduct transactions through their bank accounts, overdraft accounts, and prepaid accounts . However, customers won't need to carry their credit cards around anymore since RuPay credit cards are linked to UPI.

How to add Credit card on Phone pe

Step 1: Open the PhonePe application.

Step 2: Click on the profile icon.

Step 3: Tap to ‘view all payment methods.’

Step 4: In the credit/ debit card section, click to add a new card.

Step 5: Enter the details of your credit card.

Step 6: After OTP verification, the card will be added to your PhonePe account. Individuals can also recharge their PhonePe wallet using credit cards

What is UPI

UPI which is known as Unified Payments Interface is a real-time payment system developed by the National Payments Corporation of India (NPCI). This interface enables inter-bank peer-to-peer (P2P) and person-to-merchant (P2M) transactions easily on mobile. It is used to instantly transfer funds between two bank accounts.

It is governed by the Reserve Bank of India and operates as an open source application programming interface (API) on top of the Immediate Payment Service (IMPS)

It has been enormously successful in India, with over 8 billion transactions occurring on the platform each month. According to the cited source, UPI is used for payments by over 250 million users and 5 crore merchants. In January of this year, approximately 8038.59 million transactions were made using UPI, totaling Rs 1,299,058.78 crore.

More on UPI

UPI made great impact, with 6.7 billion transactions occurring each month as of September 2022, when the platform had 358 banks available. Any UPI client app may be used, and multiple bank accounts may be linked to a single app, for real-time payments from one bank account to another. Each bank account has a user-created Virtual Payment Address (VPA) or UPI ID that can be used to send or request money using a mobile number that has undergone KYC. For contactless payments, UPI also creates a unique QR code for each user account.

Few of the leading third party payment gateways that provide UPI services are Google pay, Phone pay, Paytm, Amazon pay and samsung pay. Apart from this NPCI manages its own app, named BHIM.

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Conclusion

Many leading payment gateways such as BharatPe, Cashfree Payments, Google Pay, Razorpay, Paytm, PayU, and Pine Labs had already agreed to allow users to make payments using credit cards on UPI on their softwares or apps.

Currently, RBI anticipates a 16 percent increase in transaction volume over the following four years by 2027.

Updated on:

June 6, 2024