The Reserve Bank on Wednesday allowed credit cards to be linked with the unified payments interface (UPI), which will enable more people to make payments using the popular platform.
Till now, only debit cards connected to savings bank accounts and current accounts were allowed to link up to the UPI platform
At present, making UPI payments is free, while credit card companies usually depend on the merchant discount rate (MDR), which is charged on every usage for making merchant payments as a revenue stream.
“... the basic objective of linking credit cards to UPI is to provide a customer (with) a wider choice of payments. Currently, UPI is linked through debit cards to savings accounts or current accounts,” Reserve Bank deputy governor T. Rabi Sankar told reporters .
RBI governor Shaktikanta Das said the exercise will start with the cards issued by the National Payments Corporation of India (NPCI).
He said the new arrangement will be implemented after system developments and instructions will be issued to the NPCI for the same.
Das said the new arrangement is expected to provide more avenues and convenience to the customers in making payments through the UPI platform.