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The National Payments Corporation of India, or NPCI, which is a state retail payment entity, hopes to implement the credit card liaison to the Integrated Interface Interface (UPI) network, said the Head of the Organization Executive Dilip Asbe. This came for more than a month after the Governor of the Reserve Bank of India Shaktikanta DAS announced that it was possible for a credit card liaison to UPI to facilitate payment.
“We are talking to BOB cards, SBI cards, Axis banks, and Union Bank of India. We must be in a position to submit our proposal to the Reserve Bank of India (RBI) in ten days and once we get approval, we must be able to start in two months, “Asbe said at an event organized by the Bank of of Baroda on Friday, July 22.
On June 8, Das Shaktikanta during the announcement of the Monetary Committee (MPC) said that they proposed to allow credit card liaison on the UPI platform. This step, however, is expected to test the benefits of discount discounts (MDR) available for UPI users. According to experts, the benefits of zero-MDR are one of the main reasons behind UPI’s growth and preferences among traders instead of using cards. On credit cards, banks and payment service providers divide the amount paid by traders for each card transaction that is carried out. This is around 2-3 percent of the total payment in the credit card case. “We may have taken care of smaller traders and protect them from MDR while existing credit card service traders can continue to pay,” Asbe said.
Deputy Governor of RBI T. Rabi has said in June that “Going to the price structure of jumping gun” and RBI “will see how the price”, when asked about the difference in UPI and credit card prices and how the two will be synchronized.
The basic purpose of connecting credit cards to UPI is to give customers a wider payment option. UPI is currently related to a debit card and a savings bank account, but now it will be linked to a credit card as well. We will introduce the relationship between credit cards with UPI, and see how the price is, “he said.
In accordance with the guidelines that came into force since January 1, 2020, UPI and Rupay attracted zero-MDR-which means that there is no fee in this transaction.
“At present, UPI facilitates transactions by connecting savings/accounts currently through the user debit card. Now it is proposed to allow connecting credit cards to the UPI platform. To start, the Rupay credit card will be associated with the UPI platform, “Shaktikanta Das said in June. This arrangement is expected to provide more paths and comfort to customers in making payments through the UPI platform, RBI said in a statement.
