National Payments Corporation of India (NPCI) in partnership with payment aggregators has enabled credit card transactions on the platform. This will allow users to use a credit card for online transactions.
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The latest decision comes just days after RBI facilitated RuPay credit cards to UPI. BharatPe, Cashfree Payments, Google Pay, Razorpay, Paytm, PayU, and Pine Labs have agreed to allow users to make payments using credit cards, which was not an option until now. The move will also help users enjoy the benefits of short-term credit and rewards offered by credit cards.
As of now, people are only able to make transactions using bank accounts, overdraft accounts, and prepaid accounts. Now that RuPay credit cards have been linked to UPI, one won’t have to carry credit cards with them while traveling anywhere to make payments.
UPI, or Unified Payments Interface, is a payments system that allows users to transfer money between bank accounts instantly, without the need for any bank account details. It has been hugely successful in India, with over 8 billion transactions taking place on the platform every month.
The latest move is also expected to boost digital payments in India, as credit card transactions are often associated with higher ticket sizes, and can be used for a wider range of transactions. This will give users more flexibility and choice when it comes to making payments, and is likely to drive the adoption of digital payments in the country.
The cited source says that over 250 million users and 5 crore merchants are using UPI for payments. In January this year, around 8038.59 million transactions were made using UPI, which is about Rs 1,299,058.78 crore. With the addition of credit cards, RBI is expecting the transaction number to grow by 16 percent in the next four years.