The national payments corporation of India (NPCI) is likely to operationalize the linking of credit cards to the unified payments interface (UPI) network. This comes in line after the announcement of RBI governor, Shaktikanta Das, on the allowing of linking the credit cards to UPI to facilitate payments.
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"We are hoping that the RuPay credit card linking to UPI should get operationalized in couple of months' time. We are talking to BoB cards, SBI cards, Axis Banks and Union bank of India. We should be in a position to submit our proposal to the Reserve Bank of India in 10 days," said Dilip Asbe, CEO of NPCI, in an event organized by the Bank of Baroda, on 22 July.
Mentioning about the merchant discount rates (MDR), Asbe said in a statement that, "The payments body will aim to protect the smaller merchant from MDR, while existing credit card servicing merchants can continue to pay these rates. While credit cards attract higher MDR charges for merchants, the UPI does not deduct additional charges. Despite the announcement for linking UPI with credit cards, there is no clarity on whether credit card transactions made from UPI will attract MDR."
Commenting on the difference in pricing of UPI and credit cards, T. Rabi, deputy governor of RBI, said in a news report was quoted as saying, "Going to the pricing structure is jumping the gun and RBI will see how it will be priced. Basic objective of linking credit cards to UPI is to provide customers with wider choice of payments. Currently, UPI is linked to debit cards and savings bank accounts only, but now it will be linked to credit cards as well. We will introduce the arrangement of credit card linkage with UPI, and see how the pricing goes."
According to latest NPCI data, the total volume of UPI transactions declined to 5.86 billion in June from 5.96 billion in May. In terms of value, transactions declined to INR 10.14 trillion from INR 10.41 trillion in the previous month.