RuPay Credit Card on UPI Set to Offer Competitive Rewards from September 1

The National Payments Corporation of India (NPCI) has instructed banks issuing RuPay credit cards to ensure parity in reward points and benefits starting September 1. The payments regulator’s directive mandates that reward points and offers on RuPay credit cards for Unified Payments Interface (UPI) transactions should not be lower than those available for regular RuPay credit card transactions, except where the issuer does not receive an interchange fee.

This directive follows NPCI’s observation that the reward points, benefits, and features for RuPay credit cards on UPI transactions were not on par with those offered on standard RuPay credit card transactions.

“Issuers shall ensure that reward points, benefits, features, and other ancillary offers should not be lower (directly & indirectly) for RuPay Credit Cards on UPI transactions compared to regular RuPay credit cards, except for transactions where the issuer does not earn any interchange fee,” NPCI stated in the circular.

In June 2022, the Reserve Bank of India (RBI) allowed linking RuPay credit cards with UPI, transforming it from a “pay now” facility, where money was debited directly from the customer’s bank account. By October 2023, NPCI announced that interchange fees would be applicable on RuPay-UPI transactions. The interchange fee for RuPay credit card merchants on UPI transactions above Rs 2,000 is around 2%, although customers do not incur any charges for these transactions.

Following these developments, several banks began offering digital versions of their existing credit cards as RuPay cards. RuPay Credit Cards on UPI provide a seamless, digitally enabled credit card lifecycle experience, benefiting customers with increased usage opportunities and merchants with higher consumption through credit card acceptance via asset-lite QR codes.

Sixteen banks, including Punjab National Bank, Union Bank, Indian Bank, HDFC Bank, Axis Bank, Kotak Mahindra Bank, and ICICI Bank, currently facilitate this product. Both RBI and NPCI are promoting credit on UPI as a transformative solution, potentially offering seamless access to credit to millions, making it more convenient and affordable. Credit on UPI is currently available through two offerings: ‘RuPay credit card on UPI’ and ‘Credit Line on UPI’.

Earlier this week, NPCI Managing Director and Chief Executive Dilip Asbe reported that credit transactions on UPI are reaching Rs 10,000 crore each month, with approximately Rs 100-200 crore from the “credit line on UPI” facility and the remainder from the RuPay credit card on UPI facility.

(Disclaimer: The above article is meant for informational purposes only, and is based on a report by NPCI website. FINOSTRY suggests its readers/audience to consult their financial advisors before making any money related decisions.)

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