A big change is underway in India's digital payment space: RuPay credit cards are now available on UPI, where customers can directly make merchant payments from their credit cards. Though the Reserve Bank of India allowed this feature back in mid-2022, it is only now gaining wider traction as more banks and UPI apps implement support. The move promises a seamless blend of UPI’s widespread acceptance with the reward benefits typically associated with credit card usage.
How the feature works on UPI apps
To make a payment by a RuPay credit card via UPI, clients need to link the card to their preferred UPI app such as Google Pay, PhonePe, Paytm or BHIM. This is achieved by entering the card in the app's payment options and authenticating it using an OTP. Upon linking, the customer can then set up a UPI PIN to validate transactions. So far, 16 large banks—HDFC Bank, SBI Card, Kotak Mahindra Bank and Yes Bank—have backed this integration. Once the cards are integrated, they can then be utilized to pay merchants, online or through QR code, just like regular UPI payments from a bank account.
Which cards are supported now
Several RuPay credit cards are currently supported on UPI. These comprise top-selling cards such as HDFC Bank UPI RuPay, SBI IRCTC Platinum, IndusInd Platinum, Kotak Myntra, Yes Bank Paisabazaar PaisaSave and ICICI Bank HPCL RuPay credit cards. Some of them have attractive rewards, cashback reward plans and other benefits when used through UPI for eligible transactions. The expansion in acceptance of RuPay is also adding to the increasing significance of the local card network in a market dominated so far by Visa and Mastercard.
Why to use your credit card on UPI
Allotting a RuPay credit card to UPI offers consumers the convenience of UPI transaction and earning the same rewards on it as they would earn on regular credit card spend. Transactions through UPI using the associated credit card get billed on the user's credit card account for the month, making it easy to track expenditures. The feature is also more convenient, particularly when carrying a physical card is not feasible. Further, because of the large acceptance of UPI, small vendors and neighbourhood shops can now accept payment on credit with negligible investments in infrastructure.
Limits and major prohibitions
It must be pointed out that RuPay card transactions in UPI are restricted to merchant payments only. Money cannot be sent peer-to-peer or transferred to bank accounts by customers through this facility. Maximum transaction limits per day are typically set at ₹1 lakh, but higher amounts can be charged for individual categories. First-time users can be placed under a reduced limit of ₹5,000 in the first 24 hours of activation. Standard credit card security practices, such as CVV verification and OTP authorization, apply here to continue providing user security.
Who does it benefit most
This feature is of most use to regular UPI users who want to maximize the rewards from credit cards without giving up convenience of using UPI. It is also attractive to individuals who like all their spend to be consolidated into a single credit card statement for easy budgeting. However, since the feature does not support peer-to-peer payments, it is of most use to users whose end objective is to use credit on retail or online merchant spends.
With RuPay credit cards having joined the UPI ecosystem, Indian customers soon will be having a more sophisticated digital payments experience that takes advantage of the ubiquity of UPI and the benefits of credit-based spending. As more and more people adopt it, this fusion is another milestone in the ongoing development of India's fintech market—one that can redefine consumer expectations of what seamless, rewarding payments should feel like.
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