SBI, Axis, ICICI Bank to go live on 'Rupay Credit card on UPI' by March

Move likely to cause a spike in daily transaction values on this feature, see many UPI users absorbed into credit card ecosystem

Leading credit card issuers SBI Card, ICICI Bank, and Axis Bank are expected to go live on RuPay credit card on UPI feature by March. The move will boost daily transaction values on this feature, which stand at Rs 50 lakh a day now, the chief exectuive officer of National Payments Payments Corporation of India (NPCI) told Business Standard.

Currently, three public sector lenders — Union Bank of India, Indian Bank, and Punjab National Bank — are live on this feature. Recently, the country’s largest credit card issuer, HDFC Bank, went live on the new UPI feature launched by NPCI, giving it a boost in the process.

“HDFC Bank has gone live on the RuPay credit card on UPI, along with PNB, Indian Bank and Union Bank. Three other large credit card issuers — ICICI Bank, Axis Bank, and SBI Card — are expected to go live by March. These banks are currently working on the technology integration part,” said Dilip Asbe, managing director and CEO of NPCI.

“This feature is seeing a daily value of Rs 50 lakh and it will grow as the other large credit card issuers come on board,” he said.

Mails sent to Axis Bank, SBI Card, and HDFC Bank did not elicit a response till the time of going to press.  

In June, the Reserve Bank of India allowed linking of credit cards to UPI, which was thus far being used as “pay now” facility. The move, the sources said, will provide additional convenience to users and enhance the scope of digital payments.

The idea behind this move is to expand the size of the merchant base that accepts credit card payments. Roughly 2-4 million merchants accept credit cards, while over 50 million merchants accept UPI payments. So, this feature is looking to include these 50 million UPI merchants in the formal credit economy. This is expected to drive consumption in a very big way.

Consequently, the NPCI came out with guidelines that eliminated all extra charges on small merchants for transactions of up to Rs 2,000 processed via RuPay credit cards on UPI. The circular issued by NPCI, the umbrella entity for retail digital payments in the country, said small merchants would also be exempt from interchange, app provider, and other tariffs.

“The RuPay credit on UPI feature has the potential to expand the credit card market by 2-3 times,” Parag Rao, country head-payments business, consumer finance, digital banking & marketing, HDFC Bank, had said at the Business Standard Insight Summit last week.

“We have people on the electronic railroads. They usually have their accounts debited immediately on the completion of a transaction, and therefore have a track record of electronic payments. Some of them will need credit. And we have created the rails on which credit can be accessed by these customers. So, the market expansion will definitely happen,” Rao had said.

While the RBI gave the go-ahead to link credit cards with UPI through RuPay credit cards initially, it is likely to allow the facility for other card networks, such as Visa and Mastercard as well.

“We have started with RuPay cards. But if you see the vision document of our department, the idea is to generally link credit cards with UPI. This, we believe, has the potential to be a game-changer in this field. This will enhance the benefit of credit and UPI to a large number of populations,” a senior RBI official had said earlier this year.

Joining the force
 

• HDFC Bank has gone live on RuPay credit card on UPI
• PNB, Indian Bank and Union Bank of India are already live
• Move to boost daily transaction values on the feature
• May also see many UPI users absorbed into credit card ecosystem  
• Roughly 2-4 million merchants accept credit cards; over 50 million accept UPI payments