Credit cards to be linked with UPI

Subject: Economy

Section: Money and Banking

Context:

In a move that will add to the growing popularity of the Uni- ﬁed Payments Interface, the Re- serve Bank of India has proposed linking of credit cards to UPI.
To begin with, the Rupay credit cards will be linked to the UPI platform.

Linking credit cards with UPI

At present, UPI facilitates transactions only by linking savings/ current accounts or through debit cards. The new facility will allow users to link UPI to their credit cards, too.
To begin with, the Rupay credit cards will be linked to the UPI platform.
Linking of credit cards with UPI will provide additional convenience to users and enhance the scope of digital payments.
The basic objective of linking credit cards to UPI is to provide the customer a wider choice of payments.
The addition of RuPay credit cards adds a credit line facility to UPI. Having a choice of payment beneﬁts both the merchant and the customers.

MDR rate unclear

It is not clear how the merchant discount rate (MDR) will be charged for UPI transactions through credit cards. At present, there is zero MDR on UPI and Rupay debit card payments.