The Reserve Bank of India (RBI) today announced that credit cards would be able to be linked to UPI accounts, marking a significant change in how the system works. The RuPay credit cards will be the first to be linked, followed by other card networks like Visa and Mastercard.
Customers could only attach their debit cards to UPI till now. RBI Governor Shaktikanta Das made the statement during his monetary policy speech.
“UPI makes transactions easier by connecting customers’ debit cards to their savings or current accounts. It is currently intended to allow credit card linkage on the UPI network, with RuPay credit cards being the first to be linked, “he stated
The governor stated, “This will bring more ease to users and expand the reach of digital payments.”
It’s currently unclear how the Merchant Discount Rate (MDR) will be applied to credit card UPI transactions. The merchant pays a percentage of the transaction amount for each transaction, which is then split between the banks and payment service providers.
