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Credit cards can now be linked to UPI

June 08, 2022

Credit cards can now be linked to UPI
In a major shift in how the Unified Payments Interface (UPI) functions, the Reserve Bank of India (RBI) today said that credit cards also will be allowed to be linked to the UPI accounts.

The execution will start with the native RuPay credit cards being allowed to be linked, trailed by other card networks like Visa and Mastercard.

Until now, clients could interface their debit cards to UPI.

The announcement was made by RBI Governor Shaktikanta Das in his monetary policy speech.

“UPI facilitates transactions by linking savings or current records through users’ debit cards. It is presently proposed to allow linking of Visas on the UPI platform in the first place the RuPay Mastercards will be linked to UPI,” he said.

“This will give extra comfort to the clients and improve the extent of digital payments,” the lead representative said.

It is as yet not satisfactory how the Merchant Discount Rate (MDR) will be applied for UPI transactions done using credit cards. For every transaction, the trader pays a certain percentage of the transaction amount which is then divided among the banks and payment service providers.

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