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RuPay credit card-UPI

Updated: Jun 8, 2023

Recently, a new feature was made available by the National Payments Corporation of India (NPCI) that allows RuPay credit cards to be linked to the unified payments interface (UPI). To use your credit card in a store, you are no longer required to have a point-of-sale (POS) terminal. You may now use the UPI app to pay with your credit card by simply scanning QR codes at merchant outlets thanks to the new RuPay credit card on UPI feature. Learn about its features and limitations.

Who can use the UPI-RuPay credit card feature ?

At the moment, the RuPay credit card via UPI is only available to certain bank customers via the BHIM app. According to a circular issued by NPCI on September 20, 2022, "Customers of Punjab National Bank, Union Bank of India, and Indian Bank will be the first to be able to use RuPay Credit Card on UPI with BHIM App."

How can you link your credit card to UPI ?

According to experts, linking a RuPay credit card to UPI is similar to linking a savings bank account or debit card to UPI.

What payments can be made using the RuPay credit card on UPI ?

Only merchant payments can be made using RuPay credit cards on UPI. As the RBI has approved the auto-pay option for recurring transactions of up to Rs 15,000 without the additional factor of authentication, a customer can also use this new feature to pay their electricity or OTT bills or other recurring merchant payments, as said by Lalit Chowdhary, Senior Vice President, Mindgate Solutions.

What payments can not be done using RuPay credit card on UPI ?

The following transactions cannot be done using the RuPay credit card on UPI, however they may be completed using direct debit from a savings account on UPI, according to Mehta.

1) Sending money to any other UPI handle belonging to an individual. For instance, you cannot use a RuPay credit card on UPI to send money to friends or family members who have formed their own UPI handles as people.

2) Payments to any other credit card-UPI handles cannot be made using the RuPay credit card-UPI handle. In essence, this means that you cannot use your own credit card to make a UPI payment into someone else's credit card.

3) Sending money to small businesses in the P2PM category (P2PM is the NPCI category for small businesses having an estimated monthly inward UPI transaction of less than or equal to Rs 50,000). This would encompass a sizable number of tiny street vendors/shops, such as chai wallahs, vegetable vendors, and street food vendors.

"So it effectively means that credit cards can be used to pay via UPI largely for payments only at big merchants," he added.

What will be the transaction limit for RuPay credit card on UPI ?

The typical transaction limit for the RuPay credit card on UPI has been set at up to Rs 1 lakh per transaction for the majority of retailers. According to Sidhant Ryan Malhotra, founder and CEO of SlayPay, "For verified merchants in specific categories, the limit can go up to Rs 2 lakh per transaction." The daily transaction limit for non-verified merchants has been set at Rs 2,000.

How will it benefit the merchants and customers ?

The NPCI circular states that transactions using RuPay credit cards through the UPI for Rs 2,000 or less will not be subject to Merchant Discount Rate (MDR), interchange, or other fees for small-offline merchants (businesses with turnover up to Rs 20 lakh during the previous financial year are categorized as small merchants by Reserve Bank of India). "For the merchants, credit card acceptance required expensive PoS infrastructure, but now they can accept credit card payments simply with inexpensive QR codes," said Malhotra.

"Primarily, the offering is aimed at driving three things, in our opinion – driving digital finance deeper, bringing in more coverage on the UPI side, and driving the growth of RuPay as a credible alternative to Visa and Mastercard. By bringing RuPay credit cards to UPI, the ecosystem will be able to create credit line products on UPI rails on the go also. This may well become the fastest way to drive credit products in tier III or IV areas across the country," said Das.

Payment of credit card bill through UPI

"Yes. Customers can pay their full credit card bill through UPI. This is a good and convenient feature for customers who are increasingly becoming familiar with digital payments through UPI," said Das.

"NPCI has introduced enough safeguards to ensure that restrictions which are there in the physical cards presentment for restricted MCC codes is applied when the credit card on UPI platform is used. This is enabled by restricting the MCC defined in OC 82 namely IPO, mutual funds, collection use cases like credit card bill payments, loan repayments, B2B collections and pre-approved transactions. The restrictions in place are checked both at NPCI and bank level to ensure only RBI complied credit payments are enabled in the ecosystem," said Chowdhary.

"It has been long held that a credit card cannot be used for cash withdrawal at a merchant location. For instance, you cannot swipe your credit card at a shop and request the shopkeeper to give you cash in lieu of the swipe. The same provision has been extended to RuPay credit cards on UPI. One cannot make a UPI payment and request to be reimbursed in cash. The reimbursement, if any, will go back to the credit card directly," said Amit Das, CEO, and Co-founder,, a fintech company.


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