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Credit Cards-UPI integration Beneficial for Both Merchants and Consumers

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Shailendra Singh, is an assignment of rejuvenating and resurrecting BOB Financial Solution (erstwhile BOB- CARDS), and positioning it as a force to reckon with in the Credit Card landscape. A veteran banker, he has been associated with Bank of Baroda for more than two decades and rose from the ranks to Chief General Manager. He has held different leadership roles in the Bank across different functions and geographies across India and has played role in various transformative initiatives of the Bank.

In conversation with Charulatha, Correspondent, Siliconindia Magazine. Shailendra shares his views on the steps should businesses and financial institutions take to promote the adoption of credit card integration in UPI among their customers.

The concept of integrating credit cards into the UPI ecosystem and how does it work.
As we all know, the Unified Payments Interface, or UPI as it is commonly known, has become the preferred payments platform, primarily due to the ubiquitous presence and ease of use. UPI has been adopted rapidly across the length and breadth of our country. Till June 2022, the customer’s bank account was the only source of fund for UPI transactions. This changed when the RBI allowed linkage of RuPay Credit Cards to UPI. Hence, now a customer’s RuPay Credit Card can also be a source of fund for UPI transactions, in addition to the bank accounts.


The process to link a RuPay Credit Card with UPI is quite simple and customer-friendly. Most of the well-known UPI apps like Paytm, PhonePe, GPay etc. prominently display messages asking their users to link their RuPay Credit Card to UPI. Users can follow the simple steps presented on the screen and add their RuPay Credit Cards(if enabled by the issuer) to UPI after the required verification steps. Once linked, it works just like any other UPI transaction – the user has to select the particular RuPay Credit Card as the source of fund, and enter the UPI PIN to complete the transaction.

The key benefits of integrating credit cards with UPI for both consumers and merchants.
For customers, the credit card now offers the convenience of being used at any merchant accepting UPI payments, from the neighbourhood vegetable seller to the milkman and even the newspaper vendor. This expands the utility of the credit card to places where traditional card payments used to deplete bank balances. Additionally, there's no longer a need to physically carry the credit card, reducing the risk of fraud and loss.

For merchants, especially smaller ones, this advancement is advantageous as they don't need to invest in expensive acceptance infrastructure. Instead, a simple QR code is sufficient for UPI transactions, making it easier for them to accept digital payments. This, in turn, opens up their customer base to a broader audience, as customers no longer need to worry about having sufficient funds in their bank accounts to make purchases, making transactions more accessible and efficient.

The user experience enhancements that can result from integrating credit cards into UPI, such as one-click payments and in-app purchases.
The integration of credit cards with UPI eliminates the necessity to carry a physical credit card or even a wallet, as a mobile phone alone becomes sufficient for transactions. Remembering card details such as the card number, expiry date, and CVV is no longer required; a simple UPI PIN is all that's needed to complete the transaction. The uniform and user-friendly interface across various UPI apps ensures that customers from all backgrounds can easily adapt to using UPI, including the newly added feature of credit cards on the UPI platform.

Steps should businesses and financial institutions take to promote the adoption of credit card integration in UPI among their customers.
Financial Institutions are working on educating the customers that linking a RuPay Credit Card to UPI is as simple as linking their bank account and also comes with all the benefits of a Credit card. This is also a strong and relevant reason for activation and frequent usage as CC-UPI transactions can be done at all kinds of merchants, from large format retail to the roadside stall. Communication at all touch points, including the points of sale, and preferably in a language that the customer understands easily, will help much faster adoption of CC-UPI linkage.

Industrys commitment to Security in Credit Card-UPI Transactions.
Security in credit card and UPI transactions is a top priority for financial institutions, payment processors, and regulatory bodies. National Payments Corporation of India(NPCI) is working on its own as well as with issuers to make the UPI ecosystem safer and more secure, both for Credit cards and other UPI transactions. Person to Person(P2P) transactions are not allowed currently and Fraud Risk Monitoring rules are continuously evolving to ensure security of transactions, along with customer convenience.

Growth in UPI-Based Credit Card Payments.
Linkage of RuPay Credit Cards to UPI will certainly bring in incremental spends from merchants who do not have the traditional payment acceptance infrastructure. This will also help increase the activation and usage of Credit Cards in deeper geographies. In established markets and at large merchants, there will be a need to monitor transactions from the commercial perspective.