UPI-Credit card linking likely in two months

The National Payments Corporation of India, or NPCI, which is the retail payments entity of the country, expects to implement the linking of credit cards to the unified payments interface (UPI) network, the organisation’s chief executive Dilip Asbe has said. This comes over a month after Reserve Bank of India governor Shaktikanta Das announced the allowing of linking of credit cards to UPI to facilitate payments.

“We are talking to BoB Cards, SBI Cards, Axis Bank, and Union Bank of India. We should be in a position to submit our proposal to the Reserve Bank of India (RBI) in ten days and once we get the approval, we should be able to start in two months,” Asbe said at an event organised by the Bank of Baroda on Friday, July 22.

On June 8, Shaktikanta Das during his Monetary Committee Meet (MPC) announcement said  that it was proposing to allow linking of credit cards on UPI platforms. This move, was however, expected to test the Merchant Discount Rate (MDR) benefit available to the users of UPI. As per experts, the zero-MDR benefits is one of the key reasons behind the growth of UPI and its preference among merchants instead of using cards.

On credit cards, banks and payment service providers divide the amount paid by the merchant for each card transaction done. This is around 2-3 per cent of the total payment in case of credit cards. “We might to have take care of the smaller merchants and protect them from the MDR while the existing credit card servicing merchants can continue to pay,” said Asbe.