• Hey there! Welcome to TFC! View fewer ads on the website just by signing up on TF Community.

RBI allows linking of Credit Cards to UPI platforms

Apply For Lifetime Free IDFC First Credit Card
chinmay

chinmay

TF Select
News just coming in; RBI allows Credit card to be linked to UPI

It would give great boost to CC payments and acceptance in India

@TechnoFino dada and other specialist on the forum; what’s your take?
 
Apply For LTF AU LIT Credit Card
Sort by date Sort by votes
I am not the specialist but certainly looks better for consumers, but credit utilization would increase now, debit cards will go out of fashion very soon this way.

More and more credit = higher inflation

Now we can now buy 1 Re Eclairs via UPI/credit card too 😉. If there is no MDR involved now for credit cards based UPI's, I can even send money from credit card to my friend/mom/wife via UPI and use it myself for 45 days as interest free money. I can even make a FD out of that credit card money and get 3% interest p.a from the bank with bank's money. More the limit on your credit card, better the Ponzi scheme.
 
Upvote 0 Downvote
Souvik said:
If so merchants we were already paying POS, with credit cards directly. So its just another layer of UPI with no substantial value addition.
Click to expand...
I guess the MDR on UPI or Rupay is quite less as compared to usual POS machines issued by banks.
Souvik said:
I am not the specialist but certainly looks better for consumers, but credit utilization would increase now, debit cards will go out of fashion very soon this way.

More and more credit = higher inflation

Now we can now buy 1 Re Eclairs via UPI/credit card too 😉. If there is no MDR involved now for credit cards based UPI's, I can even send money from credit card to my friend/mom/wife via UPI and use it myself for 45 days as interest free money. I can even make a FD out of that credit card money and get 3% interest p.a from the bank with bank's money. More the limit on your credit card, better the Ponzi scheme.
Click to expand...
This is a quite good analysis. Not sure if P2P transfers would be allowed as this would lead to interest free money as rightly said.

But maybe merchant acceptance would rise as they would receive money directly in real-time and not wait for monthly settlements
 
Upvote 0 Downvote
chinmay said:
I guess the MDR on UPI or Rupay is quite less as compared to usual POS machines issued by banks.

This is a quite good analysis. Not sure if P2P transfers would be allowed as this would lead to interest free money as rightly said.

But maybe merchant acceptance would rise as they would receive money directly in real-time and not wait for monthly settlements
Click to expand...
MDR on Rupay its less, but they have ideas to cover VISA and Master card also, which has higher MDR. With less MDR, I have doubts how will Rupay offers survive in the long run, if they cant charge, cant give offers.

Interest free money as you said rightly on a small scale, we are not rich enough as a country to have QE1, QE2.....QE4. Lets have some more debt this way yay !

You are correct on Merchant acceptance, that is going to have some traction.
 
Upvote 0 Downvote
chinmay said:
News just coming in; RBI allows Credit card to be linked to UPI

It would give great boost to CC payments and acceptance in India

@TechnoFino dada and other specialist on the forum; what’s your take?
Click to expand...
I think it will be very much helpful to customers. if you see out there in your day to day small purchase transactions shops won't be having POS machine to swipe card but most off them do have QR to scan.
Other benefit I see is there will be no 100 200 rupees transaction entries in the passbook.
 
Upvote 0 Downvote
chinmay said:
News just coming in; RBI allows Credit card to be linked to UPI

It would give great boost to CC payments and acceptance in India

@TechnoFino dada and other specialist on the forum; what’s your take?
Click to expand...
I had already linked my OneCard to Google Pay. But it was never activated, I could still see the card in accounts and debit cards. Maybe now it will start working.
 
Upvote 0 Downvote
Batmanbaba said:
Good way to rotate money now... Offically... Coz initially there wont be any charges... But when people will start misusing it... Which people will do then it might add some charges in future
Click to expand...
You guys are wrong. Only saving/current account Bank linked P2P UPI and P2M UPI has Zero MDR.

OD accounts linked UPI charge 1.5% MDR (for example ICICI paylater UPI). Same pay Credit card linked to UPI will also charge some MDR.

Other types of UPI payment also charged MDR fees to merchant for example - UPI AutoPay, UPI IPO, UPI International transaction, UPI B2C etc
 
Last edited:
Upvote 0 Downvote
Multiple possibilities -

1) If you know, you can linked your OD (Over Draft) account to UPI. NPCI charged 1.5% MDR on OD linked UPI payment to merchants.

Best example - ICICI Paylater UPI.

Merchants who are not interested to pay 1.5% MDR fee for OD UPI, we get "This merchant is not supported" error when scan & pay through ICICI Paylater UPI.

2) Banks may restricted to only 10% of your credit amount utilize through UPI and valid only on Merchant UPI transactions.

3) According to the RBI, 50 per cent transactions through UPI are below Rs 200. Its possible Credit linked UPI only allowed low-value transactions under Rs200 and allowed only 5 or 10 times per day to Merchant UPI payment only.

4) NPCI may create a new Credit rail for UPI and charge upto 2% MDR fees.
 
Upvote 0 Downvote
Abhishek012 said:
Multiple possibilities -

1) If you know, you can linked your OD (Over Draft) account to UPI. NPCI charged 1.5% MDR on OD linked UPI payment to merchants.

Best example - ICICI Paylater UPI.

Merchants who are not interested to pay 1.5% MDR fee for OD UPI, we get "This merchant is not supported" error when scan & pay through ICICI Paylater UPI.

2) Banks may restricted to only 10% of your credit amount utilize through UPI and valid only on Merchant UPI transactions.

3) According to the RBI, 50 per cent transactions through UPI are below Rs 200. Its possible Credit linked UPI only allowed low-value transactions under Rs200 and allowed only 5 or 10 times per day to Merchant UPI payment only.

4) NPCI may create a new Credit rail for UPI and charge upto 2% MDR fees.
Click to expand...
Good points, loopholes will be there but they will close them eventually. Just like wallets and all those tricks to transfer money from CC to a/c.

If you abuse it somewhere there will be fail safe, 1-2% charges are expected. Or CC may or may not give rewards for such transactions too, since basically CC identifies type of transaction through merchant codes with the help of POS. UPI scan codes will be accommodated eventually for that too.
 
Upvote 0 Downvote
AllSeeker said:
Good points, loopholes will be there but they will close them eventually. Just like wallets and all those tricks to transfer money from CC to a/c.

If you abuse it somewhere there will be fail safe, 1-2% charges are expected. Or CC may or may not give rewards for such transactions too, since basically CC identifies type of transaction through merchant codes with the help of POS. UPI scan codes will be accommodated eventually for that too.
Click to expand...
UPI also identifies type of transaction through merchant codes.

Here you see few examples - UPI MCC Codes (Rs 2 Lakh limit per transaction for specific categories in UPI) -

xdtrsdt.jpg
Implementation of Rs 5 Lakh limit per transaction for specific categories in UPI -

cghf.jpg

Image source - https://www.npci.org.in/PDF/npci/up...ransaction for specific categories in UPI.pdf

and

 
Upvote 0 Downvote
hriday.haria said:
Hi Dada @TechnoFino
What kind of impact will these changes by RBI of linking UPI with CC bring to apps like YAPER.

Will Income Tax Notices on CC Spends increase in the coming few years ?
Click to expand...
I don't think so.... Business spending from your credit card is not a problem according to ITD.
but bank can punish you.
 
Upvote 0 Downvote
You must log in or register to reply here.

Similar threads

A
RBI allows two users to share one bank account for UPI | RBI increase UPI limit for Tax Payment to 5 Lakhs
Replies
15
Views
607
vine
vine
T
Wiki Credit Card Bill Payment Platforms
2
Replies
25
Views
2K
Wealth is my birth right!
Wealth is my birth right!
A
RBI allows operation of pre-sanctioned credit lines at banks through UPI
Replies
7
Views
925
Ad.Astra
A
A
RBL Bank launch RuPay Credit Cards with UPI & NCMC capabilities into RuPay Credit Cards
2
Replies
35
Views
1K
Abhishek012
A
A
RBI allows Foreign Travellers to use UPI payment in India | QR code-based coin vending machines
Replies
2
Views
454
Abhishek012
A
Back
Top