SBI, Axis, ICICI Bank to go live on 'RuPay Credit card on UPI' by March 2023

SBI, Axis, ICICI Bank to go live on 'RuPay Credit card on UPI' by March 2023:

Currently, three public sector lenders – Union Bank of India, Indian Bank, and Punjab National Bank – are live on this feature along with HDFC bank

Leading credit card issuers in the country such as SBI Card, ICICI Bank and Axis Bank are expected to go live on the 'RuPay credit card on UPI' feature by March, causing a spike in daily transaction values on this feature from the current Rs 50 lakh a day, people aware of the development said.

Currently, three public sector lenders – Union Bank of India, Indian Bank, and Punjab National Bank – are live on this feature. And recently the country's largest credit card issuer, HDFC Bank, went live on the new UPI feature launched by the National Payments Corporation of India (NPCI), giving it a huge boost in the process.

“The country's largest credit card issuer, HDFC Bank, has gone live on the RuPay credit card on UPI along with PNB, Indian and Union Bank. Three other large credit card issuers — ICICI Bank, Axis Bank, and SBI Card — are expected to go live by March 2023. These banks are currently working on the technology integration part,” Dilip Asbe, MD & CEO, NPCI, told.

“This feature is seeing a daily value of Rs 50 lakh and it will grow as the other large credit card issuers come on board,” he added.

Mails sent to Axis Bank, SBI Card, and HDFC Bank did not elicit a response till the time of going to press.

In June this year, the Reserve Bank of India allowed linking of credit cards to UPI, which was thus far being used as “pay now” facility. The move, the sources said, will provide additional convenience to users and enhance the scope of digital payments.

The idea behind this move is to expand the size of the merchant base that accepts credit card payments. Roughly 2-4 million merchants accept credit cards, while over 50 million merchants accept UPI payments. So, this feature is looking to include these 50 million UPI merchants in the formal credit economy. This is expected to drive consumption in a very big way.

Consequently, the NPCI came out with guidelines that eliminated all extra charges on small merchants for transactions of up to Rs 2,000 processed via RuPay credit cards on UPI. The circular issued by NPCI, the umbrella entity for retail digital payments in the country, said small merchants will also be exempt from interchange, app provider, and other tariffs.

“The RuPay credit on UPI feature has the potential to expand the credit card market by 2-3 times. We have people on the electronic railroads. They usually have their accounts debited immediately on the completion of and a transaction, and therefore have a track record of electronic payments. Some of them will need credit. And we have created the rails on which credit can be accessed by these customers. So, the market expansion will definitely happen”, said Parag Rao, Country Head-payments business, consumer finance, digital banking & marketing, HDFC Bank.

While RBI gave the go-ahead to link credit cards with UPI through RuPay credit cards initially, it is likely to allow the facility for other card networks such as Visa and Mastercard as well.

“We have started with RuPay cards. But if you see the vision document of our department, the idea is to generally link credit cards with UPI. This, we believe, has the potential to be a game-changer in this field. This will enhance the benefit of credit and UPI to a large number of populations”, a senior RBI official had said earlier this year.