UPSC Current affairs - Linking Credit Cards with UPI

Linking Credit Cards with UPI


  • The Reserve Bank of India has proposed to allow linking of credit cards with the Unified Payments Interface platform.

About the move:

  • The credit cards which are issued by National Payments Corporation of India (NPCI) will be the first ones who will be enabled with the UPI.
  • The Unified Payments Interface (UPI) is also managed by the National Payments Corporation of India (NPCI).
  • The significance of UPI today is significant, as the numbers speak about the milestone it has created.
  • According to the data released by RBI, it is estimated that there are over twenty six crore users on the platform including the five crore merchants on the platform.
  • In May 2022, about 594 crore transactions amounting to ₹10.4 lakh crore were processed through the interface.
  • As of now the savings and current accounts linked with debit cards are enabled with UPI.
What will be the impact?
  • This will provide the consumers with an additional avenue to make the payments in a easier way.
  • The move will also further increase the usage of credit cards and thus will increase its reach.
  • People who do not wish to use their savings for making payments can make use of credit cards.
  • This will avail them of a longer pay-back period.
  • One more important aspect is that it will reduce the dependence on the PoS machines
  • As of now, especially in the semi urban and rural areas there is a shortage of credit card Point of Sale machines.
  • So if the credit card is linked to UPI, the payments can be made using the QR code.
Way Forward:
  • It is predicted when this provision once comes into force will increase the overall spending in the economy.
  • Certainly, this move will also increase the digital payments and also increase the average ticket size.
  • Currently, the ticket size of a financial transaction in the UPI is 1,600 so by linking it to credit card will increase the ticket size of a financial transaction to Rupees 3,000 to 4,000.


          Source The Hindu

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