Linking Credit Cards to UPI for Payments? First Know These RBI Guidelines

Are you thinking of getting your credit cards linked to UPI for making payments? Well, then you should first make yourself aware of the latest norms from the central bank as you need to know all associated guidelines.

The Reserve Bank of India or the RBI has come up with a new set of instructions for users who are planning credit card UPI payments. By doing so, the users of credit cards get to pay the merchants through the cards through UPI.

Let us study what these guidelines newly introduced are.

What are the Particular Guidelines and Rules?

Below are the specifications of the new introduction:

Limits on Transactions

The limit for UPI 123Pay transactions has been enhanced from Rs.5,000 to Rs.10,000. This step has been taken by none other than the NPCI.

Updated Mobile Numbers

Weekly update of mobile numbers will be done by all banks as well as PSP applications. They will also obtain explicit users' consent for the purpose of seeding numbers on the UPI platform.

Interoperability among apps

Earlier, the functionality was limited to RuPay credit cards and some particular applications. However, now the users will be allowed to make use of any UPI app to carry out credit card transactions. The main aim of doing so is the promotion of interoperability in the framework.

PrePaid Payment Instruments, Full-KYC PPIs

Lastly, the new norms by the RBI also address PPIs. The Full-KYC PPIs will now be allowed for linking with UPI handles for payments and transactions via third-part applications.

There are also further considerable aspects to know.

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Main Aspects of the RBI's Fresh Guidelines

Here are the key points you need to know:

Linking UPI and Credit Cards

As per the new rules, users can now link their credit cards to their UPI accounts. However, you need to know that this applies to supported credit cards. That means, RuPay credit cards are needed for this. Moreover, you also require supported applications on your phone which you will use for the UPI accounts linking and making payments.

Only Merchant Payments Allowed

Next, while credit cards are applicable o a variety of payments, credit card UPI payments feature is available only for the merchant payments. Apart from this limit, the functionality also doesn't support person-to-person (P2P) or person-to-merchant-payments (P2PM) transactions. Cash withdrawals are also not supported.

Requirement of a Distinct PIN

For the purpose of security, the users will also need to set a separate PIN that they will use for credit card transactions. This is to ensure enhanced security for the users of credit card UPI payments.

Using UPI ID Or QR Code

Payments are possible via QR code as well as UPI ID. That means, you can initiate the payment process either by scanning the merchant's QR code, or by filling your UPI ID. This is followed by the selection of the linked credit card for the transaction, for the money is supposed to go from the account linked to that particular credit card.

Benefits for the Merchants

The payment option through credit card via UPI is supposed to be an advantage for the merchants. This is because they will get to collect funds/money in a very seamless, frictionless manner. The mechanism reduces the risk of data leak and the issue of data storage. Furthermore, the merchants will get the opportunity to access a broader customer base.

Additional Features Made Available

The credit card UPI payment feature comes with additional attached features like the option to AutoPay and use Dispute Resolution in case needed any time. AutoPay for bill payments along with resolution of disputes are two such features that are accessible through UPI Help.

The steps appear to be making digitalization more impactful, more secured and more simplified for the credit card users.

Bottom Line

The fresh norms from India's Central Bank are being welcomed by merchants who will have much to gain from these new introductions. The system overall seeks to ease the whole process and also fasten the same so as to save time on everyone's part. Meanwhile, there can be various such developments being made on the government's part for the country's digital enhancement.

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