Now you can do UPI Payments using your credit card
Ever wished if your credit card can also do payments using the UPI scanner when you shop at the nearby merchants. If yes, then your wish has come true. Read to know how?
“Bhaiya UPI kar do na, Card nahi chalega.”
Have you also faced such things with your local vegetable seller? We’re sure you must have had. And you must have wished then how you should be able to use your credit card everywhere. Then our very own RBI has granted this wish to you. Just hold on a bit till we unwrap the wish for you.
Imagine some 5 years back when you couldn’t imagine your life without cash in pocket. From that time to today, our payment solutions have now come a long way in last few years and their speed of adoption too has been lightning fast. Moving from cash as the ubiquitous payment mode, to debit cards, to credit cards, to mobile wallets and now finally to UPI, the journey has been no less than phenomenal. But what still remains a challenge for our nation is easy and cheap availability of credit for the masses.
Imagine a nation of 1.3 billion people has just 5.5 MM credit card users. That’s only 0.4%. And less than 10% people have access to formal credit in India like bank loans. This is way too less for India as compared to its peers like China(80%) and Brazil(56%). So in short, even though our payment solutions have evolved, we still haven’t been able to develop a credit rich economy and that’s when RBI decided to become more liberal in its stand of making micro credits available to masses through linking of credit cards and UPI.
Hence, now you may scan any UPI code irrespective of it being of Google Pay, BHIM, Amazon Pay, Paytm or WhatsappPay and pay using your credit card. What more, the UPI code doesn’t needs to be necessarily of any merchant. You may also do UPI transfers to your friends, your landlord or in that case even to your self UPI code. Sounds something new and interesting right, and your next question would be, how and which credit card company is giving this facility?
So, for now, this facility has been rolled out by few fintech firms in collaboration by banks and is being done through digital credit cards which are app based. Just go to your mobile’s app store, download the app, submit few KYC details and you are instantly issued a digital credit card in that app itself. The app shows how much credit limit is being issued to you and also gives a QR code scanner. So, you may scan and pay for QR codes and Tap and Pay at POS machines. There’s no need to carry your card even. And in case one wants to have a physical credit card, then one can order a physical copy of the same digital card and do all transactions similar to a credit card.
To name a few companies who’ve entered this space are vCard providing such credit card in collaboration with RBL Bank, Flex Pay which itself is an NBFC giving such digital credit cards for consumers. If you are thinking there’s some catch involved in this, then for now there’s no catch involved. You get same 50 days revolving credit facility just like your normal credit card that is an interest free period of upto 50 days on all payments including UPI payments to merchants and also earn your favorite reward points on all spends. Just that reward points won’t be earned in case of UPI payments, which we believe is an accepted clause for the extra comfort being provided in payment space.
Who knows, in coming days with such digital features transforming the payments space in India, people may stop carrying physical debit/credit cards at all. Smart phones with smart solutions is the future and if you also believe that our insights make you smarter, then don’t forget to subscribe our newsletter.
By: Anmol Gupta | Isha Garg
Interesting!