No charge for RuPay credit card use on UPI for transaction up to ₹2,000: NPCI

A recent NPCI circular said, “there will be no charge for RuPay credit card use on Unified Payments Interface (UPI) for transactions up to Rs 2,000 in line with the RBI direction.”

RuPay credit card has been operational for the past four years, and all major banks are enabled and are issuing incremental cards for both commercial and retail segments.

“During credit card onboarding on the apps, the device binding and UPI PIN setting process shall include and be construed as customer consent for credit card enablement for all types of transactions,” the circular said.

In order to provide RuPay Credit Cards customers with a seamless, digitally enabled credit card lifecycle experience, RBI has approved the linkage between the RuPay Credit Card and UPI.

By accepting credit cards through asset lite QR codes, customers will benefit from the ease and flexibility of using their credit cards. Merchants will benefit from the increased consumer consumption by becoming a part of the credit ecosystem.

Credit cards can now be linked to a Virtual Payment Address (VPA) i.e., UPI ID (credit card number cannot be part of this), thus directly enabling safe, and secure payment transactions.

For international transaction enablement, the existing process from the app will apply to credit cards too, the National Payments Corporation of India (NPCI) said in the circular.

Nil Merchant Discount Rate (MDR) would apply for this category up to the transaction amount less than and equal to Rs 2,000, it noted.

Merchant discount rate (MDR) represents the percentage of the transaction amount that a merchant must pay to a bank in order to accept payments via credit or debit cards from their customers.

“This circular is applicable from the issuance date and members are requested to take note and bring the contents of this circular to the notice of the relevant stakeholders,” it said.

Reserve Bank Deputy Governor T Rabi Sankar had earlier said, “The basic objective of linking credit cards to UPI is to provide a customer with a wider choice of payments. Currently, UPI is linked through debit cards to savings accounts or current accounts.”

In accordance with the circular, UPI apps will provide full transparency on credit card transactions made by a customer, by providing easy access to the transaction history and a clearly visible user interface.

The circular stipulates that credit card issuers and apps will notify customers of such transactions at appropriate points during the credit card lifecycle.

The step will promote the homegrown payment gateway and encourage wider acceptance of RuPay cards.

It further said there is a need to maintain a separate mobile number attached to an add-on card.

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