The linkage of RuPay credit cards to Unified Payments Interface (UPI) can be operational in a couple of months, the managing director and chief executive officer of National Payments Corporation of India (NPCI) said on July 22.
“We are hoping that the RuPay credit card linking to UPI should get operationalized in couple of months’ time,” Dilip Asbe said at an event in Mumbai.
“We are talking to BoB cards, SBI Cards, Axis Bank, and Union Bank of India,” added Asbe. “We should be in a position to submit our proposal to the Reserve Bank of India (RBI) in ten days’ time and once we get the approval, we should be able to start in two months’ time.”
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RBI Governor Shaktikanta Das, on June 8, had said that credit cards will be allowed to be linked to UPI. To begin with, it will only be RuPay credit cards, India's homegrown card network. Until now, customers could link their UPI accounts only through debit cards.
“UPI facilitates transactions by linking savings or current accounts through users' debit cards. It is now proposed to allow linking of credit cards on the UPI platform to begin with the RuPay credit cards will be linked to UPI," Das had said.
“This will provide additional convenience to the users and enhance the scope of digital payments," the governor had said.
This announcement had raised a question on how merchant discount rate or MDR will be charged since UPI has zero MDR. It is yet to be seen how the RBI and NPCI come up with a formula on how MDR will be charged on credit cards through UPI.
Reacting to that, Asbe said that NPCI might to have take care of the smaller merchants and protect them from the MDR. Existing credit card servicing merchants can continue to pay, he said.
Asbe also said that the NPCI’s objective is to go towards 250 million users and how it can start doing smaller credits. Further, NPCI is also looking at how 50 million merchants can start accepting credit cards, he added.
“We might to have take care of the smaller merchants and protect them from the MDR while the existing credit card servicing merchants can continue to pay,” said Asbe.
NPCI is also trying to build up the cross-border mechanism for UPI transactions, the CEO said.
“Of course, for that government to government and regulator to regulator connect is important. We hope Mauritius happens in the next few months. Many countries are looking to build a cross border transactions,” added Asbe.
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