MUMBAI: In a move aimed at providing more convenience to people with respect to using online modes of making payments, India’s top Reserve Bank has proposed linking of credit cards with the Unified Payments Interface (UPI).
In the first stage of the proposed expansion, RuPay credit cards will be linked to the UPI, the RBI announced on June 8, 2022.
The central bank also announced that India has witnessed a massive growth in the use of UPI for financial transactions, with the just-gone by month of May registering 594.63 crore transactions amounting to Rs 10.40 lakh crore that were processed through UPI.
“UPI has become the most inclusive mode of payment in India. Currently, over 26 crore unique users and 5 crore merchants are onboarded on the UPI platform. In May 2022 alone, 594.63 crore transactions amounting to ₹10.40 lakh crore were processed through UPI,” the RBI stated.
The UPI currently facilitates transactions by linking savings or current accounts through debit cards of users. The interoperability of PPIs has also facilitated access of PPIs to the UPI payment system for undertaking transactions.
“In order to further deepen the reach and usage, it is proposed to allow linking of credit cards to UPI. To start with Rupay credit cards will be enabled with this facility,” the RBI stated.
“This arrangement is expected to provide more avenues and convenience to the customers in making payments through UPI platform. This facility would be available after the required system development is complete. Necessary instructions will be issued to NPCI separately,” the top bank said.
RuPay is a product of the National Payments Corporation of India (NPCI), the umbrella organization that powers retail payments in the country. RuPay was created in accordance with a 2007 law – Payment and Settlement Systems Act – as a secure, electronic payment and settlements system in India.
India’s first-of-its-kind RuPay offers services across the globe with wide acceptance at ATMs, point-of-sale devices at shopping malls, markets and even small kiosks besides e-commerce websites like Flipkart and Amazon also.
According to the government, promotion of digital payments ecosystem is an essential aspect of the ‘Digital India’ programme and is aimed at digitizing the financial sector and economy with consequent benefits of efficiency, transparency and quality.
Over the years, digital payment transactions have grown multifold from Rs 2,071 crore in FY 2017-18 to Rs 5,554 crore in FY 2020-21.
During the financial year FY 2021-22, the total number of Rs 8,193 crore digital payment transactions were reported till 20 March, 2022, according to data shared by the Ministry of Electronics and Information Technology.
The total volume of digital payments transactions in India stood at Rs 9 lakh crore in 2018-19, and jumped to Rs 21 lakh crore in 2019-20, further to Rs 41 lakh crore in 2020-21 and Rs 81 lakh crore in 2021-22 (till 20 March 2022), the ministry data showed.
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