InvestorQ : How would the new system of UPI linking with credit cards be rolled out in India?
NISHA Nayak made post

How would the new system of UPI linking with credit cards be rolled out in India?

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Priyanka N answered.
8 months ago
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Even before we get into the roll out, let us first look at why credit cards would love this idea. In India, credit cards are just 7 crore or 5.5% penetration. Monthly transaction volumes on credit cards is Rs1 trillion while UPI is Rs10.5 trillion. In short, for the credit card companies this linking opens up a market that is already 10 times larger in volume and substantially larger in usage. By linking UPI ids to credit cards, chunk of credit card transactions are pushed via UPI. That will boost digitization of transactions.

Now for the process flow. The first step is for the National Payments Corporation of India (NPCI) to work out the rule book and RBI has just mandated them. That will take time. RBI will only permit linking of RuPay cards to begin with, and the larger franchisees like Visa and MasterCard will follow later. The issue of MDR and other costs is yet to be sorted out, but that may not be a big challenge. It is a good step in the right direction.

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