A recent circular from the National Payments Corporation of India (NPCI) has stated that there will be no charge for using the RuPay credit card on the Unified Payments Interface (UPI) for transactions up to Rs 2,000 as per RBI guidelines. According to a circular issued by NPCI on October 4, 2022, “During on-boarding of the credit card at the processors, device binding and UPI PIN setting process shall be considered as customer consent for credit card activation for all types of transactions. ”
RuPay Credit Card has been in operation for the past four years. And all major banks have implemented it. Banks offer incremental cards to business and retail segments.
The National Payments Corporation of India (NPCI) said in a circular that for international transaction movement, the process from the app will also apply to credit cards. It noted that Nil Merchant Discount Rate (MDR) is applicable for this category up to transaction amount less than and equal to Rs 2,000.
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MDR is the amount a merchant pays to a bank to receive payments from their customers through credit or debit cards every time they use a card to make a payment at their stores. The merchant discount rate is expressed as a percentage of the transaction amount.
“This circular shall be applicable from the date of issue. Members should carefully bring the contents of this circular to the attention of the stakeholders concerned,” it said.
“The basic objective of linking credit cards with UPI is to provide a wider range of payments to the customer. Currently, UPI is linked to savings accounts or current accounts through debit cards,” RBI Deputy Governor T Rabi Shankar had said earlier.
According to the circular, UPI applications will ensure complete transparency in transactions done by customers using credit cards through easily accessible transaction history and clearly visible user interface while making payments.
Credit card issuers and utilities will send appropriate notices or communications to the customer at each event in the credit card lifecycle for such transactions, as per the circular. This move will encourage payment gateways developed in the country and it will encourage widespread user adoption of RuPay cards. The report further states that there is a need to maintain a separate mobile number linked to the add-on card.
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