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UPI credit card transactions up to Rs 2,000 are free of charge: NPCI

A recent NPCI circular states that, RuPay credit card usage via the Unified Payments Interface (UPI) will be free for transactions up to Rs 2,000 in accordance with the RBI directive.


All major banks have enabled RuPay’s credit card, which has been in operation for four years, and are producing new cards for both the commercial and retail markets.


The circular from October 4 stated that the device binding and UPI PIN establishing process during credit card on-boarding on the apps ‘must include and be understood as customer authorization for credit card enabling for all types of transactions.’


The National Payments Corporation of India (NPCI) stated in the circular that the current procedure from the app will apply to credit cards as well for the purpose of enabling overseas transactions.


It stated that there would be no Merchant Discount Rate (MDR) for this category up to a transaction amount of Rs 2,000 or less.


MDR is the fee that a business pays to a bank each time a customer uses a credit or debit card to make a purchase at one of their establishments. The percentage of the transaction amount is used to express the merchant discount rate.


It advised members to take note and alert the necessary parties of its contents, stating that ‘this circular is valid as of the date of issuance.’



‘The main goal of integrating credit cards with UPI is to provide customers more payment options. Debit cards are currently used to connect UPI to savings or current accounts’ T Rabi Sankar, the deputy governor of the Reserve Bank, had earlier said.


The circular states that UPI apps would ensure complete transparency on purchases made by consumers using credit cards, including easily accessible transaction histories and a visibly clear user interface while processing the payment.


The circular also states that ‘credit card issuers and apps will notify or communicate with the client as necessary during each stage of the credit card lifecycle for such transactions.’



RuPay cards will be more widely accepted thanks to this step, which will also support the internal payment system. The add-on card demands the upkeep of a different cellphone number, it continued.


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