Last Update: February 16, 2023, 13:37 IST
Peer-to-peer transactions and person-to-merchant (P2M) transactions are two types of UPI transactions (P2P).
This facility is now being offered by some fintech platforms working with the National Payments Corporation of India (NPCI).
Fintech applications such as MobiKwik and Paytm now allow users to link their RuPay credit card 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 linking of credit cards with UPI platforms to deepen the use of digital payments in the country.
This facility is now being offered by some fintech platforms working with the National Payments Corporation of India India (NPCI). Initially only Rupay Credit Card has been made available for payment. Users need to link their RuPay credit card with their UPI ID for activation. After approving the transaction with the PIN, one can choose to make a credit card payment by scanning the UPI-enabled QR code. It is to be noted that this service allows both offline and online payments.
Peer-to-peer transactions and person-to-merchant (P2M) transactions are two types of UPI transactions (P2P). As the titles suggest, the former deals with payments made between individuals and businesses, while the latter focuses on payments made between individuals.
Credit card payments through UPI are similarly available only for P2M payments. Since credit cards are used only for payments to merchants and not for inter-bank money transfers between individuals. Experts claim that since merchant UPI ID and personal UPI ID are different, it is easy to tell the difference between P2P and P2M payments. Users using credit cards through UPI will not be charged any fee for those transactions.
Addressing the media after the announcement, Upasana Taku, Co-Founder and CEO, MobiKwik said, “Merchants both online and offline will have to pay the standard credit card MDR, which is around 1.7% for all transactions. Transactions under 2000 For, offline retailers are excluded from MDR. On the other hand, MDR charges are not yet applicable on UPI payments that are backed by a bank account.
What market analysts realized is that since credit card purchases are often more expensive than other forms of payment, retailers may suffer losses if they decline such payments. While Surinder Chawla, MD & CEO, Paytm Payments Bank, said, “We believe this capability will facilitate wider penetration of the credit ecosystem in India as well as ease payments.” However, a user should exercise caution and restrain himself from misusing the benefits. Provided by credit card.
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