MobiKwik And Paytm Apps to Now Support RuPay Credit Card Payments Via UPI

Fintech applications such as MobiKwik and Paytm now allow users to link their RuPay credit cards to UPI (Unified Payments Interface) for all merchant payments. The collaboration comes in the backdrop of the Reserve Bank Of India’s June decision. RBI allowed the linking of credit cards with the UPI platforms to deepen the usage of digital payments in the country.

This feature is now being offered by a few fintech platforms working with the National Payments Corporation of India (NPCI). Only the Rupay credit card has been made initially available for payments. Users must connect their RuPay credit card to their UPI ID to activate. After approving the transaction with a PIN, one can opt to make the payment with a credit card by scanning the UPI-enabled QR codes. It should be noted that this service allows for both offline and online payments.

Peer-to-peer transactions and person-to-merchant (P2M) transactions are the two kinds of UPI transactions (P2P). As the titles imply, the former deals with payments made between individuals and businesses, while the latter focuses on payments made between individuals.

Credit card payment via UPI is likewise only available for P2M payments. Since credit card payments are only intended to be used for payments to merchants and not for inter-bank money transfers between individuals. Experts claim that because merchant UPI IDs and personal UPI IDs differ, it is simple to tell the difference between P2P and P2M payments. Users utilizing credit cards through UPI wouldn’t be charged a fee for those transactions.

Addressing the media after the announcement, Upasana Taku, co-founder, and CEO of MobiKwik said, “Merchants both online and offline would be required to pay the standard credit card MDR, which is around 1.7% for all transactions. For transactions under 2000, offline retailers are excluded from the MDR.” On the other hand, MDR fees are not yet applied to UPI payments that are supported by a bank account.

What market analysts felt is that since purchases made with credit cards are often more expensive than those made with other forms of payment, retailers can be at a disadvantage if they reject such payments. While the Paytm Payments Bank’s MD and CEO, Surinder Chawla, stated “we believe that this capability would enable payment ease while also promoting broader penetration of the credit ecosystem in India.” However, a user must exercise caution and restrain themselves from abusing the advantage provided by credit cards.

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