Discussion RBI proposes to link credit cards to UPI

[Bapun]

In order to further deepen the reach and usage of Unified Payments Interface (UPI), Reserve Bank of India on Wednesday proposed to allow linking of credit cards to the instant real-time payment system.

RBI Allows Credit Card Linking With UPI, Will Start With Rupay Cards

www.ndtv.com

 

[Sai Jai]

In order to further deepen the reach and usage of Unified Payments Interface (UPI), Reserve Bank of India on Wednesday proposed to allow linking of credit cards to the instant real-time payment system.

RBI Allows Credit Card Linking With UPI, Will Start With Rupay Cards

www.ndtv.com

Bro so that can we pay via CC using UPI in merchant shops ??

 

[Kuttusan]

CC to CC payment now possible?

 

[Kmr]

CC to CC payment now possible?

No.

 

[Esmail]

Bro so that can we pay via CC using UPI in merchant shops ??

Ideally yes thats how it is meant to function, but a lot of factors will need to be worked out for this to be implemented. Using credit cards at merchant POS attracts MDR charge which is why many merchants levy an additional charge for paying by CC. Now if RBI and NPCI enable UPI on CC they will have to figure out who will bear the cost of the MDR if they are providing the UPI transaction for free to the customer.
Using this technique it would be very easy for people to keep rotating money between the CC and bank account and using it during the interest free period instead of paying the heavy fees linked to cash withdrawal on CC. To prevent this misuse NPCI will surely levy a 2% charge for CC to CC or CC to Bank account through UPI transfer and maybe CC to merchant transaction may be free if the merchant agrees to bear the MDR involved.

 

[Sai Jai]

Ideally yes thats how it is meant to function, but a lot of factors will need to be worked out for this to be implemented. Using credit cards at merchant POS attracts MDR charge which is why many merchants levy an additional charge for paying by CC. Now if RBI and NPCI enable UPI on CC they will have to figure out who will bear the cost of the MDR if they are providing the UPI transaction for free to the customer.
Using this technique it would be very easy for people to keep rotating money between the CC and bank account and using it during the interest free period instead of paying the heavy fees linked to cash withdrawal on CC. To prevent this misuse NPCI will surely levy a 2% charge for CC to CC or CC to Bank account through UPI transfer and maybe CC to merchant transaction may be free if the merchant agrees to bear the MDR involved.

This is what my exact doubt bro .. who will bear the MDR if by consumer they won't use if by merchant they won't accept then what is the use of bringing this hopefully npci will give clarification or levy 2% charge before implementation else it'll be big mess up like NTO

 

[Esmail]

This is what my exact doubt bro .. who will bear the MDR if by consumer they won't use if by merchant they won't accept then what is the use of bringing this hopefully npci will give clarification or levy 2% charge before implementation else it'll be big mess up like NTO

So the implementation can be such that it can depend on the merchant whether or not they want to bear the MDR, big brand outlets like Pantaloons, lifestyle, etc who have big profit margins won't mind bearing the MDR like they do for CC and the small local stores won't agree to bear it.
So if you have used PayTm for business, you would have seen that option, only if you agree to accept CC payment, the customer will see that option when they scan your merchant QR code, if you have not agreed to it, they will only see the option to pay through bank account.
The same can be done for merchant UPI QR codes, if the merchant doesn't agree to bear the MDR, the user will see the credit card option greyed out when he/she scans the QR and only see the option to pay through bank account.

 

[Sai Jai]

So the implementation can be such that it can depend on the merchant whether or not they want to bear the MDR, big brand outlets like Pantaloons, lifestyle, etc who have big profit margins won't mind bearing the MDR like they do for CC and the small local stores won't agree to bear it.
So if you have used PayTm for business, you would have seen that option, only if you agree to accept CC payment, the customer will see that option when they scan your merchant QR code, if you have not agreed to it, they will only see the option to pay through bank account.
The same can be done for merchant UPI QR codes, if the merchant doesn't agree to bear the MDR, the user will see the credit card option greyed out when he/she scans the QR and only see the option to pay through bank account.

Yeap this sounds better

 

[Kmr]

Only Rupay Credit card...

 

[Endgame]

Axis Ace credit card was launched aiming link to Google pay. Didn’t know much about it as it was only for Android devices. Just before I got Ace, I switched to iOS.