How Does Linking Upi With Credit Cards Benefit Us

In a recent development, the Reserve Bank of India (RBI) has introduced credit card linking with UPI. This is a step in the right direction and will be more beneficial for customers in the long run. Currently, UPI is revolutionizing the digital payment space and this addition will only make it easier for users to make payments. Additionally, it will help merchants gain more visibility and reach out to a wider audience.

This is being rolled out in a phased manner, and will be a great boon for both users and merchants. From the users’ standpoint, this will make transactions faster and more convenient. For merchants, this will reduce the time and effort required to accept payments through UPI.

Here are a few ways this credit card linking with UPI will benefit customers:

1. Faster Transactions 

With this new development, customers will no longer need to carry their wallets or credit cards for shopping. All they need is their mobile phone and the required UPI PIN to make a payment. This will not only make transactions faster but also more convenient. Additionally, it will also be more convenient as you will not have to keep track of multiple cards.  All you need is your UPI ID and PIN to make a payment.

2. Safer And Secure Transactions 

UPI pins are a valuable security asset for users. Apart from the convenience it provides, the UPI pin also helps to protect your account from being hacked. Hackers have less chance of succeeding if they want to access your account through UPI. This is because the UPI pin is a unique identifier and is not easily guessed or copied. Also, no personal information is shared or stored with the merchant, reducing instances of fraud. 

3. No Hidden Charges Or Fees 

For one, your bank doesn't charge any fees to use UPI. There are no annual fees or card maintenance fees, etc. Additionally, there are no hidden charges or fees associated with using UPI. This makes it a more convenient and affordable option for customers. Additionally, it offers merchants a wider reach and increased visibility.

4. Multiple Payments Options Under Single UPI App

You can use any of your payment options from the same UPI app, whether it be your debit or credit card, or even digital payments like Paytm or Amazon Pay. This gives you more options and convenience when making payments. Additionally, it reduces the need to carry multiple cards and wallets, which is a hassle and can be costly.

Expected To Bring More Users To Rupay Cards

RuPay cards are the primary beneficiaries of this first phase of UPI linking with credit cards. This will boost the business of RuPay cards and help them reach a wider audience. They can now leverage this feature to introduce better card features and benefits for users. Soon to be extended to other credit card users, UPI linking with Credit Card will be more beneficial to a wider customer base. 

What Experts Say About This New Feature

Credit card and UPI integration will be a fantastic payment method, as was always expected. As a result, users will use UPI even for expensive purchases more frequently because they will have a variety of payment options, according to Muralidharan Srinivasan, Head of Payments for FIS's APMEA Region.

Therefore, it will increase the reach of digital payments in India, support merchant relationships with card networks, first with the country's own RuPay system and later with other global players like Visa and Mastercard, and improve the customer payment experience, he expanded.

According to Srinivasan, the RBI's most recent announcement to extend the linking of UPI to credit cards is a great step toward a cashless society. He also noted that the Rupay Credit Card and UPI linking will make it possible for other regions to adopt UPI much more quickly and easily.

Customers will benefit greatly from the integration of the UPI platform with credit cards, according to Anjan Dasgupta, Partner at DSK Legal. This linking option shouldn't, however, be limited to Rupay credit cards only, he added.

Linking the UPI platform with credit cards will greatly benefit the customers of credit cards given the market-leading reach of UPI payments. However, this should not only apply to credit cards using the RuPay payment processing network in order to maintain a level playing field in the credit card market, Dasgupta said in an interview with a well-known financial services website.

This initiative would appear discriminatory if not for the fact that RuPay is an Indian financial services and payment service system created and introduced by the NPCI. All credit cards using payment processing networks like Visa, Mastercard, and Amex, etc. should be given immediate access. The other networks are all international. I fail to see why this should be restricted to RuPay credit cards at first. All credit cards' system development can be finished concurrently, he continued to add. 

According to experts, the linkage may increase acceptability because the majority of merchants, particularly those in semi-urban and rural areas, do not have credit card PoS terminals but do accept UPI via QR codes. Customers who want to use credit cards for their reward benefits and UPI for its simplicity and security will also benefit from it.

According to Mandar Agashe, the founder and MD of Sarvatra Technologies, a provider of lending solutions, the linkage will advance the idea of a "Digital India" and encourage more adoption. He stated, "It is a strategic and innovative move to link credit cards with UPI as it will promote the ultimate mission of digital India while promoting transactions through UPI. Now a consumer who wants to pay using his/her credit card can do it via UPI, with credit card being a back-end instrument. It will not only accelerate digital transactions but will also have an impact on the average ticket size of the transaction. Currently, a credit card transaction stands at about 4,000 rupees on average, compared to an average ticket size of 1,600 rupees. As a result of this development, the UPI ticket size will probably increase by about 3,000 to 4,000 rupees." 

To Summarize - 

UPI has become the trusted payment option for Indians and the transaction size is consistently crossing trillions every month. If regulated properly, it holds great potential for the Indian economy.

FAQs of How does linking UPI with credit cards benefit us:

1. What is UPI? 

UPI stands for Unified Payment Interface. It is a platform that allows customers to make payments using their bank account number and RuPay card number. The platform was created by the National Payments Corporation of India (NPCI), and it has become the trusted payment option for Indians. 

2. Where is UPI primarily beneficial?

While it is used prevalently all over India, UPI is especially useful for making payments in semi-urban and rural areas, where merchants don't have PoS terminals but do accept UPI via QR codes.

3. Which are the leading UPI payment apps in India? 

PayTM, PhonePe, Google Pay & Amazon Pay are the leading UPI apps used by Indians. 

4. Can I add multiple bank accounts to my UPI account?

Yes, you can add multiple bank accounts in your name under your UPI account. 

5. How are my UPI transactions secured? 

Your UPI transactions are secured through an UPI PIN, which is a secure way to authenticate every transaction.